Regional Economic Outlook: The Northeast Rules
Mark Zandi, chief economist for the catchily named Dismal Sciences, Inc., stated that regional economies are performing well from coast to coast, and noted that “The Northeast economy is the strongest regional economy in the country.” The Northeast lags the rest of the country in job growth, but it leads in income gains.
Zandi stressed the importance of technology in driving regional economies. Technology jobs, he said, are key to growth.
Up With TechnologyAccording to Zandi, technology is of importance to about three-quarters of the states. For several states, including California, Massa-chusetts, and New Jersey, technology is extremely important.
He then showed a list of the softest metropolitan area markets and the tightest markets. The softest markets include Mobile, AL; Baton Rouge, LA; St. Louis, MO; Milwaukee-Waukesha, WI; Chat-tanooga, TN; Albuquerque, NM; and Tacoma, WA.
The tightest markets include New York, NY; Los Angeles-Long Beach, CA; San Francisco, CA; Newark, NJ; Miami, FL; San Diego, CA; Trenton, NJ; Boston, MA; and Spokane, WA.
Stanley Duobinis, assistant staff vice president and director of forecasting for the NAHB, noted that all state economies are doing well, but there is “a wide range of expansion,” varying from as little as 0.5% in Louisiana up to 6.4% in Nevada.
He remarked that while the biggest houses may be built in the Northeast because the people are wealthier, there is not a lot of job growth, so there are fewer housing starts.
In some areas, low employment growth is limiting housing starts, he stated. “The strongest housing markets have the fastest job growth.”
States with the most single-family housing starts in 1998-99 included California, Florida, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, New Hampshire, New York, Ohio, South Carolina, South Dakota, Vermont, and Wisconsin.
Down With StartsIn 2000, Duobinis said that a national slowdown will bring a decline to housing starts. For 1999-2000, he forecasted that starts would be down for all states, with the biggest declines in Louisiana at -11.04% and Arizona at -10.54%.
Finding a growing housing market this year will be difficult, he noted, although a few sub-state areas will exist.
And for 2000-01, he predicted negative numbers for almost all states, with 19 of them showing double-digit negatives, led by Michigan at -17.88% and Texas at -16.23%.
However, if volume is more important than increases or decreases, then we need to look at the most active states, he said. These are the states with fundamentally sound economies that have been expanding for a long time. By this measure, the Mountain states and Southeastern states are the winners.