Recent reports indicate that the South is leading the nation in creating jobs, which is great news for a region that has seen thousands of manufacturing positions lost to plants overseas.
The growth of jobs is attributed to a number of factors ranging from the right-to-work climate to the increasing population of people who have left the harsh winters up north to enjoy the milder climate in the Sunbelt. The South is now home to approximately a third of the U.S. population.
The population growth has led to a surge in homebuilding activity. In March an estimated 613,000 new homes were sold in the South, nearly as much as all other regions in the country combined.
Marty Milstead, executive vice president of the Homebuilders Association of Mississippi, told the Mississippi Business Journal that homebuilding activity is a real shot in the arm for the economy.
“There are a lot of spinoff economic benefits that go with building,” he explained. “When you build a house, it creates a lot of jobs. Those jobs include retail sales for not just building materials, but appliances such as refrigerators and washing machines, and jobs manufacturing building products.”
Of course, concerns have arisen about whether or not the U.S. economy is becoming too service oriented. Fewer and fewer goods are being manufactured in the U.S., which is leading to burgeoning trade deficits. According to the Census Bureau, the U.S. consumed $51.2 billion more goods than it produced in March. The first quarter trade deficit increased by 8%. The amount of the trade deficit is about $1.65 billion per day.
Pete Walley, director of long range planning for Mississippi, said the state and country face major challenges competing in the global economy.
“We are all preaching the value of education, training and life-long learning and how, as a state, we should become more innovative and productive to compete in the global economy,” Walley said. “That message is insufficient and incomplete. We must have a more focused effort on the kinds of goods and services for Mississippi’s economy if we do not want to fall farther behind.”
Walley says whether acknowledged or not, Mississippi is well into the second structural change in its economy in less than 70 years. He defines structural change as fundamental and long-term changes as opposed to the periodic ups and downs of the economy.
“In my opinion, this is going to have a far greater impact on the state’s economy than the shift from agriculture to manufacturing,” he said.
So, we must take the good news of job creation with the somewhat stark reality of how our economy is fundamentally changing. Once again, challenges and opportunities abound, and it’s up to each of us to determine the outcome.