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Figures show economy appears to be recovering

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Earlier this year, as the General Assembly was putting together the budget to run state government, it was becoming increasingly clear that the state was finally beginning to see some lasting growth.

That was further confirmed several weeks ago, when one of the state’s economists said that “all signs are pointing to the likelihood that the recovery is here to stay.”

We’re seeing that in places like the unemployment rate, which for more than eight months now has been in steady decline.  Although still higher than anyone prefers, March’s 8.6 percent was a full percentage point less than it was in March 2011.  Kentucky saw more than 34,000 jobs added during that 12-month period.

What is promising about the growth is that it has been spread fairly evenly. Economists split the job market into 11 major categories – from manufacturing to education and health services – and over the last year six of those saw gains and two others remained steady.

A more long-term report that state budget officials gave late last month offers additional hope as well. It found that, in the first three months of this year, Kentuckians’ overall salaries were up more than five percent and are projected to outpace the national average through December.

Not surprisingly, the state’s revenues have benefited from this economic uptick. The state’s General Fund has grown by 4.3 percent over the last nine months, a figure that is significantly higher than had been forecast, and the Road Fund is doing even better, with growth up more than seven percent.

Kentucky’s efforts to boost the economy are getting more notice nationally.  Since 2008, for example, Forbes has moved us up 19 spots in its annual ranking of business climate among the states.

A national trade publication that tracks new and expanded business activity, meanwhile, put us eighth among the states in 2011, our highest ranking ever.  What’s especially remarkable is that Kentucky was the smallest state population-wise among the leaders.  We scored so highly because we had nearly 200 projects last year that either had, at a minimum, investment of $1 million, the creation of 50 jobs or the addition of at least 20,000 square feet of new floor space.

Another trade publication called Kentucky’s partnership with Ford Motor Co. the economic deal of the year last year. Thanks to a tax-incentive package the General Assembly offered, Ford has invested more than $1 billion in its Louisville operations and hired several thousand new workers.  This year, the General Assembly offered the same package to General Motors, Toyota and several large auto parts companies, if they are willing to meet the same criteria Ford did.

The auto industry has been an especially bright spot for the state in recent months. In 2011, according to the Cabinet for Economic Development, more than 70 auto-related facilities either expanded or located here.

There are still numerous challenges when it comes to getting Kentucky’s economy back to where we want it, but as these examples show, there are reasons to believe that we have a lot in our favor, too.  My hope is that 2012 continues that trend.

 

Rick Rand, D-Bedford, represents the 47th House District in the Kentucky General Assembly. He may be reached by writing to Room 351C, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601, or leave a message at (800) 372-7181 – TTY (800) 896-0305.