Recovery Continues Unevenly State by State

While the increase in percentage of personal income grew substantially nationwide from Q4 2011 to Q1 2012 (0.5 percent to 0.8 percent), the increase was disproportionally driven by resource-rich states that are recovering more quickly from the recession than others. Leaders in construction compensation increases include North Dakota, Iowa and West Virginia.

National economic growth is still an uncertain enterprise, and a closer look at the recovery on a state-by-state basis reveals that while some states are sprinting back from the recession, others are dragging their feet.

States rich with energy and commodities have been the best performers, led by North Dakota, where a mining boom improved the statewide economy by 7.6 percent in 2011, according to the U.S. Census, and personal income increased by 2.3 percent in the state in 2012?EUR??,,????'???s first quarter. Texas, a state only mildly affected by the recession, received an additional boon in the natural gas boom and is also doing well.

Employment in May increased year-over-year in 266 metropolitan areas surveyed, decreased in 101 areas, and did not change in five. Forty-five areas claimed jobless rates of at least 10 percent, but 140 areas showed unemployment below 7 percent.

Personal income rose in 47 out of 50 states in the first quarter of 2012, according to a Commerce Department report released June 27, to the tune of 0.8 percent, a marked increase over the 0.5 percent growth in the last quarter of 2011. The three outliers were Mississippi and Kansas, which declined 0.3 and 0.1 percent respectively, and Oklahoma, where the figure was unchanged.

The broader increase in personal income was also represented in the construction industry, which North Dakota also led with a 7.57 percent uptick in compensation in this year?EUR??,,????'???s first three months. Iowa and West Virginia followed, with 3.79 and 3.67 percent increases in construction compensation respectively. Oklahoma and New York were the worst states for the construction industry, with 2.41 and 2.33 percent respective declines in pay.

State tax revenue averaged an increase of only 4.5 percent in the first quarter of 2012, compared to a 10 percent increase in the first quarter of 2011, marking a slowdown of growth in some areas, despite a continuation of 10 consecutive quarters of improvement.

With fiscal year 2013 dawning on July 1, many governors are remaining cautious about the recovery. A recent survey by the National Governors Association and the National Association of State Budget Officers found that governors expect revenue to rise 4.1 percent in the next fiscal year, but are only budgeting for an overall 2.2 increase in spending. Ongoing troubles in Europe, and the Supreme Court?EUR??,,????'???s recent ruling upholding the Affordable Care Act could also have a major impact on upcoming state spending, and the economic recovery across the nation.