Rust Belt States Drive Growth in 3rd Quarter

Rust Belt states posted some of the country’s biggest economic gains last quarter as industrial production reached a four-year high, according to an analysis by Bloomberg News.
by | December 26, 2012

Rust Belt states posted some of the country’s biggest economic gains last quarter as industrial production reached a four-year high, according to an analysis by Bloomberg News.

Michigan, Ohio, Indian and Illinois were home to four of the eight largest gains for the three months ending in September, compared with the prior three-month period. In those states, 13 percent of the jobs are in manufacturing, compared with less than 9 percent on average in the U.S.

Robert Dye, chief economist at Comerica Inc. in Dallas, attributed the growth in output to a resurgen e in manufacturing.

“It’s a potential bright spot and it’s one of the good news stories that’s still out there for the U.S. economy,” he told Bloomberg.

Auto sales also played a big role as demand has risen to its highest level since March 2008. Ford also plans to expand its annual production capacity, including in two factories in Michigan and Illinois and Chrysler recently added 1,800 workers in Illinois.

Overall the economic health of 27 states showed signs of improvement, according to the Bloomberg Economic Evaluation of States Index. North Dakota posted the largest gains while California and the District of Columbia also showed significant improvement.

Florida’s struggling housing market is also improving as delinquent mortgages declined by nearly a full percentage point from quarter to quarter. Home prices there also rose by 2 percent after falling during the first half of the year. Still, prices are 42 percent below their 2006 peak.

Vermont was home to the largest economic decline while New Hampshire, New Mexico, Alaska and Wyoming showed anemic growth, according to the index.

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