Study: State’s economy saw ‘rough year’ in 2011
by MBJ Staff
Published: April 30,2012
ACROSS MISSISSIPPI — The April 2012 issue of the Mississippi Economic Outlook, a quarterly publication replacing the bi-annual Mississippi Economic Review and Outlook, is now available online at www.mississippi.edu/URC.
Published by the Center for Policy Research and Planning of the Institutions of Higher Learning (IHL), the Outlook presents the state economic forecast for 2012 to 2017, and includes detailed employment forecasts by sector. Regional, national and international developments impacting the state economy are examined.
Mississippi Economic Forecast: 2011 was a rough year for the state, which suffered a series of weather disasters and narrowly averted recession. News on the economic front has been improving for several months, however. Private sector payroll employment has been rising, retail sales growing and General Fund tax collections are coming in above estimate. Both the Mississippi index of coincident indicators and the index of leading indicators (also published by the Center) have risen for six consecutive months.
The Mississippi forecast for 2012 and 2013 is for slow but improving economic growth, in line with the national forecast of IHS Global Insight. The upswing here is expected to gather momentum in 2013, peaking in 2014 and 2015 at a real growth rate of output of 2.8 percent. The unemployment rate is expected gradually decline during this period, falling from an average 10.2 percent this year to 8.9 percent in 2015. This year, as of February, only 29 of 82 counties had unemployment rates under 10 percent.
Mississippi’s exports grew 33 percent in 2011. The top export was oil (not crude). It accounted for 24.2 percent of the $10.9 billion in total exports. “These exports are part of a striking national trend: for the first time since the 1950s, the U.S. has become a net exporter of refined petroleum products,” notes senior economist Dr. Marianne Hill. This is a result of both expanding production and a fall in demand due to the recession, the use of ethanol, and more energy-efficient vehicles.
A return to 2007 levels of employment in the state is now forecast for 2016. This year, most major industries in the private sector are expected to add jobs, including manufacturing. Several new and expanded plants have recently gone into production, including Toyota, Severstal and Schultz Extruded.
National Economic Outlook: Investors around the globe breathed a collective sigh of relief when the European Central Bank committed over $1 trillion to ensure the Eurozone’s financial stability. The move re-invigorated global stock markets. Tension surrounding Iran’s nuclear program and political instability in the Middle East, however, continue to place pressure on oil prices, causing some drag on the recovery. Also on the downside, growth rates of the strongest economies, including China’s, are slowing. The U.S. upswing is expected to peak at a growth rate of real gross domestic product of 3.4 percent in 2014.
This year is expected to be pivotal in the recovery of the housing market. For the first time since 2006, residential fixed investment is predicted to register positive growth for the year as a whole. The turnaround began in the second quarter of last year and will be critical to job creation.
The U.S. unemployment was 8.2 percent in March, and is forecast to fall only slowly, dropping to 5.9 percent by 2017.
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