The outlook by regions

Nation's Business,  Jan, 1998  

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WEST NORTH CENTRAL 3.7% 1.9%

The Plains states have the tightest labor market in the country, and growth has slowed as a result. "We've got more jobs than we've got people," says David S. Dahl, an economist with the Federal Reserve Bank of Minneapolis. The overall economy is healthy, however, and it boasts the highest level of consumer confidence among all regions.

Labor shortages are pushing up wages, says Iowa state economist Harvey Sieglman, and "it's absolutely ludicrous to think you could get workers at the minimum wage." In Kansas, Wichita is benefiting from heavy hiring at The Boeing Co.

MOUNTAIN WEST 5.8% 3.8%

The Mountain West continues to lead all regions in growth, with such hot spots as Salt Lake City, Las Vegas, and Phoenix. "What's happening in the West is tremendous economic diversification," says Phil Burgess, president of the Center for the New West, a Denver policy-research organization. Deregulation in telecommunications, transportation, and financial services helped to end the region's isolation, he says, and technology and telecommunications firms continue to invest in the Mountain States.

Arizona, the region's most populous state, is benefiting from the aviation and high-technology industries. But Marshall Vest, forecasting project director at the University of Arizona in Tucson, says that while "Arizona in Tucson, says that while "Arizona's growth has been phenomenal," now there's a shortage of a key ingredient for growth -- workers.

"We're running out of supplies, not demand," he says.

PACIFIC WEST 4.5% 3.6%

The West Coast economy is booming. California's resurgence is based on industries that are growing globally, such as movies and high technology Increased trade with Asia is also boosting the state's company.

Big defense cuts have bottomed out, and the state's is now adding jobs and income faster than the national average, says Stephen Levy, director of the Center for Continuing Study of the California Economy n Palo Alto. The challenge in 1998, he says, will be: "How are we going to handle all this growth without it having a negative impact on our lives?"

In the Northwest, Portland is seeing growth in the semiconductor business, while the Seattle-Tacoma area is in the midst of a hiring boom at The Boeing Co. and Microsoft Corp. that could go on for several years, says Lynn O. Michaelis, director of marketing and economic research at the Weyerheuser Co. in Tacoma.

The heavy hiring has created a boom in commercial construction. "It can't get much better," Michaelis says. "Now we've got too much of a good thing; it's pushing the limits on our infrastructure."

WEST SOUTH CENTRAL 4.9% 3.2%

The robust Texas economy dominates this region, an area benefiting form the oil and gas boom, growth in technology industries, and increased trade with Mexico under the North American Free Trade Agreement.

Manufacturing is moving into the corridor between Austin and the Dallas-Fort Worth area, which in turn is "doing exceptionally well," says Jared Hazelton, director of the Center for Business and Economic Analysis at Texas A&M University in College Station. And he notes the "tremendous presence" of medical research in Texas.

Along the Gulf Coast, energy exploration is in high gear. Dale Davis, chief economist for Halliburton Energy Services in Houston, is forecasting more good times. "It's going to very good for Texas and the oil patch [states]," he says. "It's a major driver behind their economies."

EAST NORTH CENTRAL 3.6% 2.7%

The manufacturing-centered Great Lakes region continues a moderate but respectable growth rate. The area is "growing at a very solid pace." says Ron Luginbill, manager of forecasting for Ameritech Inc. of Chicago. Employment expansion in this region is below the national rate because of a severe shortage of skilled workers, especially engineers.

Bernard Lashinsky, a consultant and former chief economist with Inland Steel Corp., says the automobile industry continues to invest in the region and the sales of capital equipment, such as heavy machinery and machine tools, continue to do well at home and abroad. He adds: "I don't know of any area of weakness."

NEW ENGLAND 3.4% 2.7%

The once-struggling New England economy is growing at a moderate pace. Boston is booming, with tight markets for office space and labor. Southwestern Connecticut (close to New York City) and New Hampshire are doing well. "It's a very strong economy here," says Yolanda Kodrzycki, it's comparable to the nation as a whole."

The region's economic vitality is not dominated by any one industry notes Bruce Blakey, corporate economist for Northeast Utilities, one of New England's largest electricity providers. "There are lots of small businesses in lots of different industries doing well in the Boston area land to a lesser extent in Connecticut," he says.