Iowa got a double dose of good economic news Tuesday from two monthly reports issued by state officials.
State tax collections for the first quarter of the fiscal year were up 8.8 percent from a year ago, and Iowa’s Leading Indicators Index posted its fourth consecutive month of positive growth – separate gauges that state officials say provide a snapshot of where the state’s economy has been and where it is headed in the future.
“We’re seeing some pretty widespread positives,” said Amy Harris of the state Department of Revenue’s tax research and program analysis section. “Not hugely strong signals, but generally positive.”
The strongest positive contributors to the index in August were increases in building permits and new orders, while weekly manufacturing hours was the largest negative contributor, according to the monthly report. The number of building permits issued during the 12-month period through August was the highest level in four years and indicated “the Iowa housing market appears to be in recovery” as a level 0.5 percent below the historical August average for the 1998-2008 period.
“The indicators are providing some positive signals for going forward,” Harris said. The six-month annualized change in the index continued to be positive (1.4 percent) for the seventh consecutive month. Employment growth remained at the July level, and revenue officials said the index’s recent moves suggest that Iowa employment growth will remain positive into the holiday season.
On the revenue side, Jeff Robinson of the Legislative Services Agency said first-quarter collections of personal and corporate income taxes and of sales and use receipts were very strong and indicated a prolonged period of recovery that stretched back to early spring. Overall tax collections were up $123.2 million for the July-September period – an 8.8 percent growth rate that far exceeded the flat growth projections of revenue estimators for fiscal 2013, he added.
“It’s running as good as good gets,” Robinson said. “Those are good growth numbers. You can’t look at them any other way. There is no caveat that that’s not good.”
Unemployment claims remain “a little elevated compared to normal” and housing sales – while increasing – haven’t returned to the pre-recession levels Iowa had experienced so the economy has not completely recovered, he said. But overall, he noted, “I think it’s pretty positive. It’s hard to find bad news in any of that.”
The Department of Revenue Iowa Leading Indicators Index August 2012 Report is available at http://www.iowa.gov/tax/taxlaw/econindicators.html; the Legislative Services Agency monthly revenue memo is available at http://www.legis.state.ia.us/lsadocs/MonMemo/2013/MMSLS002.PDF.