RICHMOND, JUNE 1 -- Economic policies by Middle Atlantic states have helped the region surpass the nation in income growth and employment levels, a study by the Federal Reserve Bank of Richmond shows.
The study said those policies also have created a healthy business climate that should allow continued expansion in the Fifth Federal Reserve District, which covers Virginia, Maryland, North Carolina, South Carolina and West Virginia.
"The future economic strength rests firmly upon the foundations in place today: the responsibility exhibited by district state governments, the diversified nature of the district economy, the stabilizing influence of federal government expenditures and the district's favorable location," the report said.
"This combination of factors leads to an economic outlook that has to be termed optimistic."
The report was prepared by James F. Tucker and economist Ray Owens, both of the Richmond Fed.
The two said the study was prompted by an article in Inc. magazine that ranked four of the Fifth District's states -- Virginia, Maryland, North Carolina and South Carolina -- among the top 15 states in terms of stimulating balanced entrepreneurial activity and economic expansion.
The Middle Atlantic's economic strength is reflected in income and employment figures. Government statistics show that from 1980 to 1985, regional personal income grew at a rate of 8.6 percent while personal income rose 8.01 percent nationally during the same period.
The most recent unemployment figures show that U.S. joblessness in 1986's fourth quarter was 6.83 percent. This compares with a Fifth District unemployment rate of 5.43 percent for the same period.
Many factors affect economic growth, but good utilities, communications and transportation networks are vital, Tucker said. Middle Atlantic states have paid particular attention to these areas, he said.
"The Fifth District's government leaders have excelled in infrastructure management," the report said. "For example, the district's transportation systems -- overland, water and air -- attest to effective infrastructure management." As an example, Tucker said four states -- Maryland, Virginia, North Carolina and South Carolina -- have concentrated recently on airport expansion.
The report said well-managed state budgets often preclude supplemental tax increases, and this allows businesses to plan costs with greater ease.
"Further evidence of the long-term soundness on which district states govern is provided by bond ratings. Of the seven states in the nation whose state bonds carry top investment rankings according to both Moody's and Standard & Poor's, four of these -- Maryland, North Carolina, South Carolina and Virginia -- are located in the Fifth District."