Mississippi’s bankers and lenders can’t seem to get out of each other’s way as state appears to be late in the recession and out
While tardy to settle into the economic slump that beset much of the nation starting in early 2008, the Magnolia State seems to be equally late in emerging from it. In fact, Mississippi’s neighbors are officially out of the recession but it is still in one, economist Anirban Basu said in a visit to Jackson in late October, advising members of the Mississippi Associated Builders and Contractors to expect a 2011 economy in Mississippi that is merely “less worse” than that of the current year.
Meanwhile, news reports throughout the year frequently touted a new company or two coming to the state to set up operations and create jobs. The biggest news came in June with Toyota’s announcement that it would proceed with building a Corolla manufacturing plant in Blue Springs, after having called off the project in 2009.
Through 2010, Mississippians endured bad employment news as well, as a scattering of manufacturers across the state either shut down or moved away. Those closings have been frequent enough to cost the state 19,600 manufacturing jobs since the Oct. 2008 economic collapse, economists say.
At the end of October, Mississippi’s jobless rate stood at 9.7 percent. Counties such as Rankin and DeSoto, with rates of 6.3 and 7 percent, respectively, were spared the deep pain of unemployment felt elsewhere in a state that in July saw nearly a third of its 88 counties hit unemployment rates above 15 percent.
At the end of October, the state’s worst jobless numbers belonged to Clay County, 17.8 percent, and Noxubee County, 19.2 percent.
Between Oct. 2008 and Sept. 2010, the state lost 119,500 jobs, reports the state Institutions of Higher Learning’s “Global Insight.” At the current pace of recovery, Mississippi’s annual job growth will be an un-dramatic 1.5 percent through 2015, projects the IHL, an arm of the Mississippi Board of Trustees.
Marianne Hill, senior economist for the IHL, attributed Mississippi’s failure to join neighboring states in coming out of the recession to larger-than-average government sector and smaller-than-average health care and business-professional sectors.
Mississippi’s banks avoided the parade of bank failures seen in Florida and Georgia but are serving a residential mortgage market that had a 14.4 percent delinquency rate in the second quarter, tying it with Nevada as the nation’s worst for on-time house payments.
On the business lending side, the state’s bankers say they have money to lend but aren’t getting the level of credit requests to which they had become accustomed. Businesses say they want to borrow but can’t meet the stringent requirements and today’s higher credit costs.
“Either way, we have a log jam that is not going away anytime soon,” wrote Nancy Lottridge Anderson, president of New Perspectives Inc. in Ridgeland and an assistant professor of finance at Mississippi College, in a July column for the MBJ.
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