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Moon: 2010 could hinge on politics

Jay Moon

Jay Moon

The state’s manufact- uring sector certainly has not been exempt from the recession. Workers have lost their jobs and plants have been idled, and some closed all together, as demand dropped.

The past few months have offered some signs of life, according to Jay Moon, president and CEO of the Mississippi Manufacturers Association.

“A lot of manufacturers have run though their inventory and are now going back and starting production again. We’ve got some expansions and some other things that are beginning to gin back up.”

Because of that, Moon said there is reason for optimism among members of the manufacturing community for 2010.

In the early part of this decade, when Mississippi lost a good-sized portions of its manufacturing base as companies shipped jobs overseas, the manufacturers that remained engaged in a game of musical chairs when it came to mergers and acquisitions, something that is common toward the end of a recession, Moon said.

“We can probably expect some of that in Mississippi. How that impacts any of our manufacturers, we just don’t know at this point.”

Congress could provide a clue. Once the issue of healthcare reform is settled, the focus will shift to several pieces of legislation that have been relegated to the back burner the past few months, none of which has gotten any support from the manufacturing community.

The Waxman-Markey bill, commonly referred to as Cap and Trade, will likely be at or near the top of the list of priorities once Congress gets going in 2010.

“I think (how 2010 goes for manufacturers) depends a lot on some of the things that are under discussion in Washington – everything from healthcare reform, cap and trade, card check, the EPA declaring that greenhouse gases are injurious to public health,” Moon said. “If any of those end up becoming law, they could have a very serious and direct negative impact on manufacturing, which is just beginning to show some recovery. If given the opportunity to be successful, I think manufacturing will begin to get back on its feet, begin to rehire people and get strong again here in the state and in the country as a whole.”
Further clouding the outlook for 2010 is continued competition from countries like China, whose manufacturing base has not been as affected by the recession and whose political leadership is not mulling legislation that could overhaul the way it does business.

“There will probably be fewer new projects over the past year simply because people are going to watch and see exactly what is going to happen out of Washington,” Moon said. “The importance of maintaining what we have is critical. It’s a very, very uncertain environment right. Having said that, if given the opportunity and not hit with all kinds of regulations and new costs, manufacturing could begin to grow again.”

At the state level, things look a little better. Gov. Haley Barbour and leadership in both chambers of the Legislature are in almost total agreement that there will not be any new taxes to offset the decline in state revenue. Barbour’s budget recommendation and the Joint Legislative Budget Committee’s budget recommendation for fiscal year 2011 reflect that.

“We were very happy to hear that,” Moon said. “That would be a step in the wrong direction.”

Moon said his organization would again try to persuade lawmakers to eliminate the state’s inventory tax, which businesses pay at the end of every calendar year based on the value of their inventory. Efforts the past few sessions to eliminate the tax have failed.

“We have great companies here in the state, and if they are given the opportunity to be successful, we can experience some recovery in 2010,” Moon said.

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