Lower unemployment, bankruptcies and foreclosures in March reduced the nation’s economic stress to its lowest point this year, according to The Associated Press’ monthly analysis of conditions around the country.
More than 85% of the nation’s 3,141 counties and every state but two — Louisiana and South Dakota — enjoyed better conditions in March than in February, the AP’s Economic Stress Index showed.
In Elkhart County, hub of the RV industry, the stress index has improved.
The county’s economic development board is negotiating to land 11 projects from companies in Britain, China and Norway that want to expand in the United States, said Dorinda Heiden-Guss of Elkhart’s Economic Development Corp.
About 40% of workers are employed in manufacturing in Elkhart County, whose Stress score was 13.36 in March, down from 22.28 two years ago. The county’s notoriety as a casualty of the recession might have put it on the radar of the international companies now looking to open plants there. The greater availability of financing also helped.
“Banks loosened up,” said Heiden-Guss.
Meanwhile, manufacturing activity, a major driver of economic growth since the recession ended in June 2009, has helped ease hardship in the Great Lakes states and Indiana over the past 12 months — more than in any other region.
By contrast, Louisiana, Iowa and the Mountain states of Idaho and Montana have suffered the sharpest increases in stress, year over year.
The average county’s Stress score was 10.5 in March, the lowest level since December. It was 11 in February and 11.5 a year earlier.
Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. Using that rule, less than one-third of the counties were stressed in March, down from nearly 40% in February.
Unemployment in March declined or was unchanged from February in every state but South Dakota and in nearly 90% of the counties. Bankruptcies dipped in 43 states and 70% of the counties. And foreclosures dropped in 44 states and in more than 70% of counties.
In March, economic strains eased the most in counties with heavy concentrations of workers in manufacturing, retail and temporary staffing jobs. By contrast, stress rose the most in counties with many workers in wholesale trade and mining.
The government reported last week that the overall economy’s growth slowed sharply to an annual rate of just 1.8% from January through March. That was down sharply from a 3.1% rate in the final three months of 2010.
Many economists think the slowdown will be temporary. Nariman Behravesh, chief economist at IHS Global Insight, thinks growth will rebound to nearly 3% in the current April-June quarter. He predicts it will strengthen further to around 3.5% in the second half of the year.
The unemployment rate, now 8.8%, will dip possibly as low as 8% by year’s end, Behravesh says. He says the economy should be able to withstand this year’s jump in gasoline prices.
“Gasoline prices at around $4 per gallon will be a headwind, but they would have to go quite a bit higher to derail things,” Behravesh said.
Among all the most economically precarious states, stress levels declined in March. Nevada was again the most stressed state, with a score of 20.67. Next were California (16.19), Florida (14.52), Michigan (14.23) and Arizona (14.23). Still, thanks to gains in tourism, stress has declined more sharply in Nevada and Florida than in any other states over the past six months.
North Dakota remained the economically strongest state with a score of 4.89. It was followed by Nebraska, (5.7), South Dakota (6.27), Vermont (6.51) and New Hampshire (6.85).