TUPELO — National economists were bullish about the Northeast Mississippi economy, particularly the furniture sector, at the economic forecast conference held Jan. 24 in Tupelo.
“The South may already be in the beginning phase of a rebound,” said Donald Ratajczak, CEO of BrainWorks Ventures in Atlanta, which invests in new technology-based businesses. “2003 could be a very interesting year. 2002, we’ve got to firm up a few things.”
Ratajczak, a frequent CNN and CNBC contributor who founded the Georgia State University Economic Forecasting Center, said the recession was a mild one and that recovery would be gradual. He pointed out that the recession was curing economic woes by making companies become leaner and meaner, protecting “what’s good in the system while removing what’s bad.”
He predicted that the Federal Reserve would likely end its binge of interest rate cuts. On Jan. 30, Federal Reserve chief Alan Greenspan announced that interest rates would indeed remain steady. Ratajczak also predicted that the Federal Reserve might begin raising rates by summer.
“Everybody has been talking about Enron, K-Mart and the downsizing of Motorola and other tech sectors, asking how deep does this downturn go?,” said David Rumbarger, CEO of the Community Development Foundation in Tupelo. “It was very refreshing — and good timing — to hear from Don Ratajczak and furniture analyst Jerry Epperson.”
Epperson, of Richmond, Va., predicted the furniture industry, the region’s biggest manufacturing employer, would rebound — and prosper — after enduring the worst recession the furniture industry experienced in post-World War II America. The furniture industry, besieged with retail failures and plant closings nationwide, hit bottom in April and May 2001, he said.
“This decade is going to be fantastic,” Epperson said, citing statistics of Baby Boomers entering peak earning years, the trends of more second homes and larger primary homes and hefty inheritances from the prosperous previous generation. “In the next two or three years,
you’re going to be surprised about the upside.”
Last year, retailers in the furniture business took a hit by downsizing or going out of business, like Bradley’s, Montgomery Ward, Heilich-Myers and others, said Rumbarger.
“It really had an impact on the furniture sector in Northeast Mississippi, rippling through the summertime at plants like Kensington, Simmons and Hon/All Steel,” he said. “There were bright spots in the region, with growth through newcomers like Cherry Creek, Corinthian, H.M. Richards and Spartech. The cycle of business and industry continues and the important focus on development, training and growth capacity are relevant and necessary.”
Rumbarger said the message at last year’s conference was that the drawn out presidential election had stalled the economy and things should pick up in the fourth quarter of 2001.
“Then the tragedy of Sept. 11 occurred and the economy and our nation’s confidence took a direct hit,” he said. “During last year, we saw unemployment in our region sneak up as we all battled the national and world trends.”
Last year, CDF launched several new initiatives and collaborated on several others, including the Future Focus fundraising campaign, in which $2.38 million was raised, significantly more than the goal of $1.6 million.
The United Way of Northeast Mississippi ended its recent fundraising campaign $32,000 over its goal.
“With the economy the way it was and everything else we faced, topping our goal was incredible,” said Melinda Tidwell, executive director of the nonprofit agency.
Rumbarger said the Future Focus program helped regional leaders “center our thoughts on the rich history of entrepreneurship.”
“With the help of the Appalachian Regional Commission, we have conducted an incubator feasibility study that will result in a small business incubator making a home here in Tupelo/Lee County in the coming months,” he said. “Working with the regional Technology Task Force, the Mississippi Crescent Initiative and CREATE, the concept of a regional broadband cooperative is forming. One of the goals of the work being done is to be able to compete for jobs and capital development for existing companies and new industries in the future. Our hope is to develop a base of technology skills to compete successfully in the future and to bring a technology mindset to business and industry in our region.”
The CDF recently initiated the Future Focus-funded training and development initiative to advocate skill enhancement of the current working wage earner and to prepare the next generation of skilled workforce for the jobs of the future.
“With educational assets second to none such as Northeast Community College, Itawamba Community College, University of Mississippi and Mississippi State, this region is prime for skill development and enhancement for the future,” he said.
The CDF is collaborating on the regional initiative to focus on automotive component parts and original equipment suppliers of parts to automotive plants in Tuscaloosa and Lincoln, Ala., and in Canton through the North Mississippi Industrial Development Association, Rumbarger said.
“We are also working with Three Rivers Planning and Development District on a super industrial site in conjunction with Pontotoc and Union counties,” he said.
At a recent meeting, Rumbarger said regional plant managers reported that employment has stabilized.
“Eljer, who produces plumbing products for Home Depot, is producing over 100%,” he said. “Action is working at 100% and adding people, but some sectors, like Cooper Tire, lagged. However, they’re experiencing their second positive sales months — December and January — over the last 10. That’s a bit of an uptick, but not like the travel seasons we’ve seen before in the spring and the fall. They had some out time during the holidays in December, probably more than people wanted, and they’re doing some replacement hiring. They hadn’t been doing that since last August.”
Rumbarger said even fledgling signs in the regional economy were promising.
“Economists are more bullish except for maybe state economist Phil Pepper, and he’s looking at the lag in the state revenues,” he said. “But Phil even conceded that sales tax receipts were up in December, and it looked like that trend would stay for the January historical basis.”
Tidwell, who attended the conference, said she was very encouraged by the good news, “especially the comments made about the furniture industry, an industry we are so heavily dependent on.”
“When that industry and others in the area are doing well, the United Way is going to do well,” she said.
Contact MBJ contributing writer Lynne Wilbanks Jeter at firstname.lastname@example.org</a.