March 15, 2006

Western economic growth slows

Analysts expect most Western states' economies to slow a bit in 2006 and 2007, even while outperforming the national economy, according to the current issue of the Western Blue Chip Economic Forecast.

The inflation-adjusted gross domestic product, the standard measure of real output, may barely expand by 3.5 percent in 2006 and continue to weaken in 2007, according to Lee McPheters, contributing editor. This follows gains of 4.2 percent in 2004 and 3.5 percent in 2005.

"The three fastest-growing Western states - Nevada, Arizona and Utah - are expected to slow down over the next two years," McPheters says. "Still, it is likely that these states will be in the top 10 for job creation yet again this year and next."

Elsewhere in the Western Blue Chip, editor Tracy Clark reports the consensus panel expects 2006 to be another solid year for single-family home construction in the Western region.

Single-family housing permits are expected to increase slightly in Nevada and Utah, and remain at current levels in Oregon and Wyoming. Those states with fewer permits will register declines in the single digits - the largest in California.

"Most analysts expect that what goes up must come down," Clark says. "The big questions are, how far and how fast will home building pull back from record levels in 2004 and 2005?"

The monthly Western Blue Chip Economic Forecast publishes the consensus forecasts of panels of economists in 10 Western states. Panelists are drawn from leading firms, universities and state agencies. The publication also features historical data for each state.

The Western Blue Chip Economic Forecast is published 10 times a year by the Bank One Economic Outlook Center, an affiliate of the L. William Seidman Research Institute at ASU's W. P. Carey School of Business. The cost is $110 for 10 print issues ($99 for e-mail subscription). For subscription information, call (800) 448-0432.