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Finally, the "dismal science" has some good news to report. For the third year in a row, Montana's economy has grown--a circumstance we haven't seen since 1979. Moreover, our state significantly outperformed the national economy in both 1991 and 1992, its relative pace slowing only in the last year.
As you can see in Figures 1 and 2, Montana's nonfarm labor income decreased an average of 0.5 percent per year during the 1980s, while the U.S. overall enjoyed a 2.1 percent per year rise for the same period.(Figure 1 and 2 omitted) The state experienced short periods of stability or even slight growth during the decade, but as measured by nonfarm labor income, Montana's economy was smaller in 1990 than in 1980.
These trends reversed as the 1990s began. Struck by recession, U.S. nonfarm labor income decreased about 1.1 percent in 1991, while the comparable measure for Montana rose 1.7 percent. Historically, recessions have been relatively mild in Montana. The 1990-91 recession was even milder than most, so when the U.S. economy fell and Montana's picked up, the media took note. Hence the stories spotlighting our economy. The data isn't final yet, but 1992 looks even better for this state. The latest reports suggest our nonfarm labor income increased 5.1 percent in 1992, the largest single-year growth rate since the late 1970s, and well above the recovering U.S. economy's increase of 3.0 percent.
Estimates for the first half of 1993 suggest that Montana nonfarm labor income grew at a 3.1 percent annual rate, while the U.S. rose 1.5 percent. However, once the negative impacts of 1993 mine closures and wood products industry cutbacks have been tallied, we expect Montana's overall growth rate for the year will drop to 1.2 percent.
This more modest rate will likely continue. We project Montana's nonfarm labor income to increase 1.1 percent in 1994, 1.8 percent in 1995, and 1.6 percent in 1996. The accelerating national economy will once again outstrip the state's growth rate.
MONTANA'S GROWING SECTORS
Table 1 shows nonfarm labor income by major industry for Montana's growth years of 1991-92.(Table 1 omitted) Only the mining sector suffered a significant decline during the period, and over half the total rise in nonfarm labor income came from three...