Montana leads nation in income growth

Montana led the nation in income growth during the third quarter of last year, culminating a fast climb from the economic cellar in less than a year, according to a new federal report.

By BOB ANEZ, Associated Press Writer Helena IR

The U.S. Bureau of Economic Analysis said Montana’s total personal income rose 1.5 percent in the July-September period, compared with a national increase of 0.9 percent.

The state’s standing marks a rapid recovery since the end of 2001. In the final quarter of that year, Montana’s total income dropped 1 percent, ranking its performance 49th among the states.

But in the first quarter of 2002, Montana had the 32nd fastest-growing income and then climbed to 20th in second quarter.

Net earnings — what workers make on their jobs — drove Montana’s resurgence, the BEA report showed. The state experienced a 2.4 percent increase in that component of total income, the highest in the nation for the third quarter.

Nationally, earnings grew by less than half the Montana rate, or 1.1 percent.

Paul Polzin, director for the Montana Bureau of Business and Economic Research, said that is a very significant increase for the state since it measures what people get paid for production of goods and services.

He also said the overall income growth for the third quarter reflects his agency’s predictions and is further proof that Montana avoided much of the effects of the national recession and other economic factors.

"It doesn’t surprise me," Polzin said. "We don’t have the industries that were affected by this particular business cycle, corporate scandal, decline in consumer confidence."

The BEA reported that two other states — Wyoming and Florida — were close behind Montana in third-quarter income growth, although when rounded off their rates were the same as Montana’s 1.5 percent.

Among Montana’s other neighbors, income in Idaho and North Dakota increased 1 percent, and South Dakota’s climbed 0.8 percent. In the Rocky Mountain region, the increase averaged 0.8 percent.

When personal income is measured over the longer term, Montana ranks 39th in growth between the third quarter of 2001 and the same period last year, at 2.9 percent.

Polzin said the state’s poorer showing over that time is caused by lackluster agriculture. Beginning in the last three months of 2001, farm income has declined every quarter due to the drought, he said.

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