Mississippi will be nearing the end of this decade before job numbers in manufacturing, leisure & hospitality and several other sectors returns to the pre-recession levels of 2007, state economists say in a new report.
The news is not entirely bad, however.
The November issue of the Mississippi Economic Outlook reports that the leading indicators by which state economists gauge Mississippi’s economic health showed an unexpected 2 percent gain in August, reversing four months of decline.
Conversely, the state’s job picture grew grimmer over the summer. Employment registered its lowest level since 1996, giving Mississippi the distinction of being one of three states with job levels at their lowest point since the start of the recession in 2007.
It’s expected the state won’t see hiring return to 2007 levels until 2018, according to the November issue of the Outlook report published by the Institutions of Higher Learning’s Center for Policy Research and Planning. “Manufacturing, leisure & hospitality, and other sectors will reach that milestone even later” than 2018, the report said.
The job picture should brighten somewhat in the intervening years, the state economists say, with economic growth of 2.7 percent in 2015 inching employment growth up by 1.3 percent. “The unemployment rate will gradually decline, falling from an average of 9.4 percent this year to 7.9 percent in 2015,” the Outlook report said.
While September showed some improvement, Mississippi’s unemployment rate remains above 9.7 percent in most counties and 2012 is expected to close with the state seeing no increase in payroll employment as a whole, Economic Outlook report said.
Any pickup in employment must wait until next year, the Outlook reported predicted. That uptick is expected to come from new jobs in healthcare and a turn-around in construction.
Meanwhile, on the brighter side all but one component of the state’s economic leading indicators showed improvement in August, the new Economic Outlook reported.
Compared to the level six-months prior, the index of economic indicators climbed an annualized 2.0 percent, the Outlook report said, and noted in a further bit of encouraging news that the revised growth rate for July was 1.1 percent.
The August reversal in leading indicators is surprising, the Center said. “One month does not make a trend but the evidence suggests that the third quarter will prove to have been improved over the second.”
Indicators showing improvement are residential building permits and housing starts (up sharply); retail sales (up modestly); and employment in manufacturing of durables (up 0.8 percent). Further increases are expected as the Blue Springs Toyota plant continues its ramp up and other new manufacturing plants go into production, the Outlook report said.
Mississippi’s businesses have not performed as well as their counterparts nationally in the recession years, having recorded bankruptcies at twice the national rate in the previous decade, according to Marianne Hill, senior state economist. “The recent recession makes clear that the economic landscape in the state has changed,” she said. “Data indicate that the skill and resource deficits here are limiting the ability of smaller firms to survive and thrive as market realities change.”
Business bankruptcies rose 129 percent in Mississippi between 2000 and 2010, versus an increase of 60 percent in the United States as a whole, she said.
“Mississippi firms did not perform as well as those in other states by several other measures over the same period: the number of small firms (fewer than 500 employees, the number of establishment openings and the number of persons self-employed all fell in the state, but rose nationally.
“The underperformance of professional & business services in the state is also a concern: nationally, this sector has had the most rapid job growth of any sector since 2010, but in Mississippi employment in this sector has been falling. This drop is linked to the challenges facing businesses here.”
Further slowing the state’s economy is the drawback in federal funds coming into the state, Hill noted.
“The state received $39 billion in 2011, due in part to flood insurance, but $27 billion in 2012. Apart from funds to finance the Affordable Care Act (ACA), a downward trend in federal dollars going to the states is expected.”
Whether those funds from the Affordable Care Act, an estimated $900 million to $1 billion annually, ever reach the state is uncertain. To receive the funds, the state must agree to expand Medicaid to around 300,000 Mississippians who lack health insurance and have household incomes within 138 percent of the federal poverty rate. Gov. Phil Bryant and leaders in the Republican-controlled Legislature have vowed to reject the money.