The performance of Mississippi’s economy in 2015 may hinge on growth in building permits, retail trade and consumer confidence offsetting a slowdown in U.S. manufacturing attributed to a stronger dollar, lower oil prices and bad weather.
So say Mississippi state economists in the March issue of Mississippi’s Business, a monthly report on the state’s economy by the University Research Center of the Mississippi Institutions of Higher Learning.
The report noted that nationally, the Gross Domestic Product, or GDP, grew 2.4 percent, the largest annual increase since 2010 but still a historically low rate during an economic expansion.
In January, the Mississippi Leading Index of Economic Indicators (MLI) rose slightly. The 0.1 percent increase in value was 2.9 percent higher compared to the previous January. The index began showing strength in the last quarter of 2014 and has risen 0.7 percent in the last six months, the report said.
However, four of the seven components of the Mississippi index contributed negatively in January, according to the report, citing dips in manufacturing employment, manufacturing activity, state income tax withholdings and retail sales.
The index saw a drop of 10.5 percent in January’s initial unemployment claims compared to the same month a year ago.
The most significant index increase came in the value of residential construction permits. Permit values rose 14.4 percent in January over December and 33.6 percent over the same period a year ago. The index also saw increases in consumer expectations, increasing 3.1 percent as a three-month average that included January.
Meanwhile, Mississippi’s job market in January had the strongest month in at least three years. But the state remained tied in January with Nevada for the highest unemployment rate of any state.
The state’s jobless rate fell to 7.1 percent, down from 7.2 percent in December and 7.9 percent in January 2014. Unlike many recent months, that improving unemployment rate was not driven by Mississippians leaving the job market. The number of people looking for a job rose by 7,000.
The report found that 88,000 Mississippians were unemployed in January, about even with December but more than 10,000 below January 2014.
Trade, transportation, and utilities along with professional and business services brought most of the job gains in Mississippi in January, the March economic report said. All other sectors posted losses or no to relatively small gains, according to the report.
The largest absolute and percentage increases in employment occurred in retail, which added 2,900 jobs for the month for an increase of 2.1 percent. Retail trade employment was 2.5 percent higher in January compared to one year ago.
Professional and business services added 1,600 jobs for the month, an increase of 1.6 percent. Employment in the sector was 3.6 percent higher compared to January 2014.
The largest absolute decrease in employment in Mississippi for the month occurred in construction, which lost 700 jobs, a decrease of 1.5 percent. The December value of construction employment was revised lower and employment in the sector is off 12.7 percent compared to one year ago.
For the second consecutive month the largest percentage decrease in employment in the state occurred in mining and logging, which declined 2.2 percent, a loss of 200 jobs.
So far, the state’s manufacturing sector has withstood the national slowdown in the industry in recent months. However, employment growth in Mississippi in 2015 will require other industries such as retail trade to sustain job gains to compensate if manufacturing employment starts to decline, the March report said..