State business and economic development leaders are optimistic that the sluggish economic recovery from the 2008 recession will kick into high gear in 2015.
At 7.6 percent, Mississippi had the second highest unemployment rate in the country in November. But that is a significant improvement from rates of more than 10 percent in 2011, and there are signs that employment will improve even more in the year ahead.
“Overall, across the nation. manufacturing has come back really strong,” said Jay C. Moon, president and CEO, Mississippi Manufacturers Association. “We are starting to see a lot of reinvestment, including capital equipment purchases. A lot of businesses are looking to re-shore, come back into U.S. from foreign countries. New business will look pretty good in 2015.”
Manufacturing labor costs are still higher in the U.S. than in China, parts of Latin American and Eastern Europe. But the major decline in oil prices is a big equalizer. Moon said since energy costs are a significant factor in manufacturing, lower energy costs are making all the difference in bringing manufacturing jobs back to the U.S.
“It is better to manufacture in the U.S., in some cases, than in China,” Moon said. “It is an amazing turnaround that has a very positive impact on our ability in the U.S. to attract business to the area, or bring it back.”
Moon said the cost of transporting goods from China has increased, and orders can be filled 8-10 weeks faster by U.S. manufacturers than those in China. Other positive factors he points to include improvements at the Port of Gulfport to take advantage of the larger container ships that will be coming through the new Panama Canal.
“We are really positioning ourselves well,” Moon said. “We are doing what we need to train the workforce. I think we have some excellent opportunities for 2015.”
The state had good news in November that Nissan Motor Co. is planning to produce 507,000 vehicles a year at its Canton plant by 2017, which would add about 1,000 employees to the current 6,300 workers at the complex. Auto manufacturing continues to add jobs elsewhere in the state, as well.
In Columbus, a hot spot for major large new job creating projects in Mississippi, Golden Triangle Development LINK CEO Joe Max Higgins, said they looking forward to an extremely busy year with just under $3 billion dollars in active prospects with an excess of 4,000 jobs with a range including aerospace, automotive, food logistics and the metals industries.
“In addition, the LINK will unveil its newest advanced manufacturing park, The Innovation District in Oktibbeha County,” Higgins said. “This park will complement the 1,500-acre industrial park in Clay County and the 7,000-acre park in Lowndes County.”
The Tupelo area also continues to see new developments. David Rumbarger, president and CEO of the Community Development Foundation, said 100 people have been hired at the new GRAMMER Inc. plant located at the Tupelo Lee Industrial Park South in Lee County. The company plans to ramp up employment to 350 by the end of the 2015 and eventually up to 650.
“With the projects we have in the pipeline and the staffing up of our newest plant, the GRAMMER Inc., making seating for John Deere, Caterpillar and other equipment companies and the consoles for various BMW and Mercedes vehicles, the prospects for 2015 are bright,” Rumbarger said.
The state’s economy slowed somewhat in the fourth quarter from the rapid pace of the second and third quarters. State Economist Dr. Darrin Webb said they expect this slower growth to prevail in early 2015, but then improve through the year.
“Our current projections for Mississippi’s real GDP is a 2.2 percent growth in 2015 compared to a 1.2 percent growth in 2014,” Webb said. “We think we will end 2014 with an employment growth rate of 0.9 percent. This is expected to improve to 1.5 percent in 2015. After declining in 2014, we expect construction to pick up in 2015. Growth will also improve in retail trade, leisure and hospitality, professional services and health care services.”
Mitch Stennett, president of the Economic Development Authority of Jones County, said a rebound in the housing market was predicted earlier. “It is time for that to happen, hopefully by mid-year,” Stennett said. “That could very positively affect our area and industries, as well as the state. I have a lot of guarded optimism that the prognosticators are correct this time predicting the recovery of the housing market. It is the first-time home buyers who are holding us back. Fewer people have been able to buy their first home. When the first-time home buyers jump in there, they often buy from someone who is ready to move up to another level. So it has a ripple effect.”
Jones County is one of the top oil producing counties in the state, so the low energy prices are a concern.
“Several of our counties in Mississippi do have a large oil industry,” Stennett said. “If prices stay down, that could adversely affect us.”
On the flip side, Stennett said he hopes consumers will spend some of their gas savings this time of year to help local retailers and the economy. Overall, he sees a better outlook for 2105 than for the past four or five years.
Greater Hattiesburg has a very diverse, vibrant economy and Chad Newell, president, Area Development Partnership, expect the region to continue to gain momentum in 2015.
“During the last four years, our economic development team has tracked 157 projects exceeding $1 billion in capital expenditures and 4,000 new jobs announced,” Newell said. “Green Bay Converting is the largest industrial project coming online during 2015. The company is investing $48 million in our community, which encompasses the construction of a 400,000 sq. ft. facility that will employ 300 over a five-year period.
“We’ll continue to focus on keeping our three economic pillars strong and those sectors include healthcare, education, and the military,” Newell said. “ We are also working closely with Southern Miss officials to proactively market Midtown Hattiesburg. This is an area at the University’s doorstep that is slated to become a mixed-use development that could include retail, restaurants, a hotel, and a multi-family residential component.”
Blake Wallace, executive director, Hinds County Economic Development District, was anticipating 2015 to be a continuation of slow, but steady, growth.
“The U.S. economy seems to continue to click along,” Wallace said. “I think that will result in increased activity, at least in the U.S.”
On the Coast, Harrison County Development Commission Executive Director Bill Hessell said he believes that the economy will be positive in 2015. Request for information from companies has increased during the last quarter and he expects it to continue throughout next year.
“We just announced the expansion of Gulf Ship and you will see more maritime growth due to our efforts in this sector,” Hessell said. “Maritime and aerospace should be good sectors this coming year. We have spent a lot of time pursuing these companies and the payoff, hopefully, will happen in 2015.”
Gulf Ship purchased the former Future Pipe industrial site and plans to add 100 workers to its 600-person workforce.
Tunica County has one of the highest unemployment rates in the state after the closing of one of the county’s largest casino resorts, Harrah’s. Most recently the unemployment rate was about 15.3 percent. Lyn Arnold, president/CEO, Tunica County Chamber & Economic Development Foundation, sees the economy improving in 2015.
“We are beginning to see quite a bit of activity, and financial resources appear to be more available for projects,” Arnold said. “Tunica County has a couple of projects that appear very promising for 2015. Activity has remained strong this year and the diversity of projects has been very interesting.”
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