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Hot spots? Northwest Mississippi and Jackson, study says

Where are the hot spots in Mississippi’s economy? According to the 2006 Economic Strength Rankings that have been posted recently on the Web site www.policom.com, the four counties in the top northwestern part of the state that are part of the Memphis Metropolitan Area (MA) rank highest in the state coming in 12th in the country. And the Jackson MA ranks an impressive 60th out of 361 MAs in the U.S.

“This part of the state is very dynamic,” said Lyn Arnold, president and CEO, Tunica Chamber of Commerce. “There is a lot of diversity to it. There is strong manufacturing and distribution based up there, and a strong entertainment base, as well. We have very aggressive educational institutions in this region, and we have attracted large residential developers over the past few years, too. That is a key.

“I also think our relationship to Memphis is an attraction for the area. You can live in Mississippi, and have the wonderful quality of life we offer, and yet you can have some amenities out of the Memphis area we can’t necessarily offer right now.”

Jackson also ranked well, coming in the top 16% of the metropolitan areas of the country.

“Jackson is improving,” said William H. Fruth, president of POLICOM Corp. and the author of the report. “Jackson is ranked number 60 for 2006 compared to 83 in 2005 and 72 in 2004. Jackson is holding its own in the top 80 out of 361 metropolitan areas for several years. Regionally, it has a strong economy. It is in the top 16% of the metropolitan areas of the country. Any community within the top 100 is a fairly strong economy. The bottom 100 communities are having problems.”

The POLICOM report uses data from 23 sectors of the economy over a 20-year period of time to gauge economic strength judged by the long-term tendency for an area to consistently grow in both size and quality. Fruth said POLICOM analyzes local and state economies, determines if they are growing or declining, identifies what is causing this to happen, and offers ideas and solutions to improve the situation. The data lags two years behind the report. Hence, the 2006 report contains data from the year 2004.

The report looks at 361 MAs and the 577 micropolitan areas in the U.S. The study adjusts for size differences so both metropolitan and micropolitan areas area evaluated on the same footing.

“Size doesn’t matter,” Fruth said. “Madison, Wis., is relatively small, and yet it is in the top 25.”
He cautions that a change of 10 to 15 in the rankings is not statistically significant. Also, you can’t look at just one year, but should consider the trends over a longer period of time.

Tim Coursey, executive director, Madison County Economic Development Authority, attributes the Jackson metro area’s high ranking to visionary leadership culminating in a high quality of life.

Madison County has seen a great deal of new commercial and residential development in recent years. Coursey said while it is hard to be certain how much of that to attribute to the location of Nissan in Canton in 2002, no doubt Nissan has been a major benefit.

“Nissan has had a phenomenal economic impact,” Coursey said. “But a lot of the reasons Nissan located here were related to our quality of life. Madison County has one of best school systems in the state. The administration is wonderful. The teachers are great. People move here just for the school system. We worked on schools for years, and also provided the infrastructure for industrial parks and commercial development. Madison County was ready, and Nissan saw that. Therefore, they were great fit.”

The impact is continuing as Nissan grows along with Madison County. Coursey said the Madison County Economic Development Authority stays extremely busy responding to requests for information from companies interested in locating in the area.

“Now they are here, the impact is ongoing,” Coursey said. “You can look out 20 years from now and the landscape will change drastically. Construction is booming. That is sort of a phenomenon of its own. Businesses are feeding off each other, and growing and thriving. Many people who got jobs at Nissan have moved to the area so they don’t have to drive so far to work. Industry is looking at the Jackson metro area as the new Mecca for development. Educated, aggressive, dynamic entrepreneurs and business folks are moving here. The brainpower is moving here, and that is driving a lot of the growth.”

Fruth said that certain industries provide better economic benefits than others. Manufacturing is at the top of the heap because wages are high and major industries require a large number of support industries. Tourism and retiree recruitment are the lowest on the scale.

“Retirement creates the second lowest paying jobs in an economy, and tourism creates the lowest paying jobs in an economy,” Fruth said. “So when you recruit and try to create those two industries, you are creating low-wage jobs. Retirees are entitled to live and move anywhere in U.S. they want to. But as far as an economic development program, you need to look at the types of jobs created by various industries.”

Fruth said gaming is marginally better than the typical tourism job when it comes to pay and benefits. The bigger benefit of gaming is tax revenues to government.

The next best economies in the state after Jackson in the 2006 report were Gulfport-Biloxi at 263 and Hattiesburg at 284. Both have dropped in the rankings. Gulfport-Biloxi has dropped from 223 in 2005 and 198 for 2004. Fruth speculated that might be because the flurry of construction activity related to gaming resorts diminished.

Hattiesburg dropped to 284 from 247 in 2005 and 230 in 2004.
But efforts by the University of Southern Mississippi to spark economic development may help Hattiesburg improve when its rankings come out next year. Fruth says universities can have major impacts — both positive and negative — on economic development.

“In eight out of 10 communities with a large university, the universities don’t cause economic growth,” Fruth said. “Texas A&M is beautiful example. Its economy has been flat lined for 20 years. Some universities actually cause an economic decline.”

He gives as an example Fort Collins, Colo., home to Colorado State. Fruth said a number of anti-business academics have been elected to public office and enacted anti-business laws.

“And they are quite proud of it,” Fruth said. “As a result, their primary employers leave the area because they can no longer afford to be there. Fort Collins has been dropping pretty fast. There are examples across the country where anti-business academics have taken control of a local government.”

Another example is the University of Florida, Gainesville. Fruth said it is the largest research institution in Florida, but has hardly any business spinoffs from research.
“Gainesville is one of those communities controlled by anti-business groups,” he said.

One out of 10 universities actually causes economic growth. Fruth said that takes cooperation between the university and community, a mutual desire to encourage economic development.

“You need a team to make it happen,” he said.
Other factors impacting economic development in Mississippi include tort laws. Fruth said that the ease of being able to sue companies kept business from coming to Mississippi for many years.

“I have heard that a lot of that has changed under Gov. Barbour,” Fruth said.

Mississippi has 20 micropolitan areas. Fruth said overall micropolitan areas have a much weaker economy than metropolitan areas. For example, the strongest micropolitan on his list, Concord, N.H., would rank only 50th if ranked with metropolitans. The second strongest micropolitan wouldn’t even rank in the top 100.

Mississippi had six micropolitans in the top 100: Tupelo, 35, down from 18 two years earlier; Vicksburg, up to 38 from 89 two years earlier; Oxford, 41, down from 14 two years earlier; Meridian, 55, up from 138 two years earlier; Laurel, 83, up from 110 two years earlier; and Brookhaven, down to 97 from a rank of 31 two years earlier.

Other Mississippi rankings were Starkville, 142; Columbus, 257; Picayune, 258; McComb, 323; Corinth, 334; Grenada, 403; West Point, 426; Greenville, 468; Greenwood, 483; Natchez, 499; Yazoo City, 537; Clarksdale, 539; Cleveland, 555; and Indianola, 565.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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