Since we will publish our annual Book of Lists on December 25th, this issue is my last opportunity to write a column for 2006. With this week’s edition, we take a look back at a few of the business headlines of 2006, as well as anticipate a few of the important stories likely to unfold in 2007.
Every year is unique and this one was certainly no exception.
Interest rates climbed steadily during 2005 and stabilized in 2006. Our predictions for a strong economy in 2006 came true and we were rewarded with economic growth and a rising stock market throughout the year.
Better batten down the hatches for 2007, however. Indications point toward an economic slowdown though no one is using the ugly “recession” word. We’ll probably have growth but at a lesser rate than in 2006. The current recovery has gotten old and tired and has already outlasted most recoveries in recent years. Time for a little rest.
Overall, the housing bubble has ended. Predictions are for a slight decrease in house prices for 2007. Notice I said “overall.” For our Gulf Coast, housing is the biggest problem we face in rebuilding and construction will continue in a frenzy for years to come.
Hurricane Katrina was more devastating to our Gulf Coast than anyone who hasn’t been there can imagine. In spite of the efforts of thousands of volunteers and millions upon millions in funds flowing to the Coast, it will require years and years for full recovery. We need 80,000 new, or substantially renovated, housing units in an area that usually builds about 2,500 units a year.
The unfortunate silver lining to the Katrina dark cloud will be the biggest construction boom since the casino building frenzy of the mid-1990s. It will take years to rebuild the Mississippi Gulf Coast. Learning the construction trade and participating in the work offers a ray of hope to many who have lost their jobs and need to begin a new career. The Mississippi Construction Education Foundation and the Coast community colleges are working fervently to train construction workers, and they are to be commended for their rapid, and effective, response to the situation.
The controversy over insurance coverage is making a bad situation worse. The hair-splitting over whether the damage was caused by wind or water and in what order the damage occurred has created a really sorry state of affairs. If we’ve learned anything from Katrina it is that insurance coverage should be comprehensive and pay benefits if the property is destroyed regardless of the cause. I think we’ve also come to grips with the importance of adopting and enforcing building codes, particularly in storm-prone areas.
Ah, it’s the Christmas season once again. In spite of the problems we’re facing, it’s time to experience the magic of Christmas. Everywhere, houses and offices are decorated and everyone is in a festive mood. And that’s as it should be. For even though tragedy has visited our state, God’s plan for our salvation is steadily unfolding. It is only right that we pause amongst the hustle and bustle of our daily lives to celebrate the birth of Jesus Christ.
Many of us will be winding down work in the next few days. Then it will be holiday traveling for some, staying close to home for others and deer hunting for those of us who aren’t happy unless we’re cold and wet. Nonetheless, we’ll be back the first of the year and begin anew for another year.
To me, Christmas and Easter are the two most important dates on the calendar. Both remind us of what is really important in life and help us rise above the trivial problems that plague our everyday lives. To all our readers, we hope for you and yours the happiest of holidays and, as politically incorrect as it might be, MERRY CHRISTMAS!
Thought for the Moment
But the angels said to them, “Do not be afraid. I bring you good news of great joy that will be for all the people. Today in the town of David a Savior has been born to you; he is Christ the Lord. ”
— Luke 2:10
Joe D. Jones, CPA (retired), is publisher of the Mississippi Business Journal. Contact him at email@example.com.