Great Lakes Area Income Growth Up : New England Figures Still Increase Fastest, Commerce Dept. Says

Associated Press

Income growth in the Rust Belt manufacturing states around the Great Lakes is staging a comeback after lagging behind the national average for most of the 1980s, the government said today.

The Commerce Department said non-farm personal incomes continued to grow fastest in the high-tech industrial states of New England from the second quarter of 1987 to the second quarter of this year, as they have through most of the current economic expansion.

From the end of the last recession in the third quarter of 1982 and continuing through the April-June period of last year, incomes in the coastal regions--New England, the Far West, Southeast and Mid-Atlantic--have grown faster than in the regions in the middle, the Great Lakes, Plains, Southwest and Rocky Mountain areas.

The disparity has led Reagan Administration critics to dub the current expansion “the bi-coastal economy.”


New England Still on Top

However, in the last year, the mix has begun to change. New England is still on top, but the Great Lakes and Mid-Atlantic states dependent on traditional heavy manufacturing are improving, and income growth in the Southeast and Far West has cooled a bit.

For the United States as a whole, the annual rate of non-farm personal income growth for the year ended in June was 7.7%, up from 7.1% in the earlier part of the economic expansion.

Here’s how the various regions fared:


--New England: 9.5%, up from 8.7%.

--Mid-Atlantic: 8.7%, up from 7.4%.

--Far West: 7.8%, down from 8.2%.

--Great Lakes: 7.7%, up from 6.2%.

--Southeast: 7.5%, down from 7.9%.

--Plains: 6.2%, up from 5.9%.

--Southwest: 5.8%, up from 5.5%.

--Rocky Mountain: 5.2%, up from 5.1%.


‘Big-Ticket’ Items

The Commerce Department attributed gains in the Great Lakes states to strength in the manufacturing of durable goods, “big-ticket” items expected to last three or more years, and in construction. It said the Mid-Atlantic region also benefited from a pickup in manufacturing.

Growth in the Southeast as a whole was down, but by state it was mixed. Weak growth in incomes from service jobs in Georgia and interior states more than offset strong growth in the Atlantic coast states of Florida, North Carolina, Virginia and South Carolina.

Economists have been anticipating gains in the so-called manufacturing Rust Belt of the nation. The drop in the value of the dollar over the last three years has made U.S. goods less expensive on overseas markets.