By BECKY GILLETTE
What’s ahead for Mississippi’s economy in 2017? Mississippi Development Authority Executive Director Glenn L. McCullough Jr. expects 2017 to be another exciting year in economic development in Mississippi.
“Gov. Phil Bryant and the Mississippi Legislature have enacted several strong, pro-business measures like the phaseout of the franchise tax and the creation of the Mississippi Works fund which dedicates $50 million toward workforce training,” McCullough said, “I can assure you MDA will continue our mission to attract more and better jobs through our aggressive economic development efforts. Our team is working hard to helping our existing businesses grow while recruiting world-class companies to the state.”
The phase out of the franchise tax will reduce the current $2.50 tax on each $1,000 of capital by $0.25 a year until it is fully eliminated by 2027. The Mississippi Works fund commits $50 million toward workforce training by the state’s community college network and WIN Job Centers.
“This fund also will provide tax relief for Mississippi employers by lowering the state’s unemployment insurance taxes paid on a portion of the employee’s wages,” McCullough said. “We believe these efforts, along with the state’s already substantial business advantages will benefit the people of our state through a stronger economy.
A highlight of 2016 was the signing of a memorandum of understanding with Continental Tire in early February for the location of the company’s next commercial tire manufacturing facility in Hinds County.
“The process of recruiting and closing the deal lasted nearly two years,” McCullough said. “The Legislature overwhelmingly passed a $263-million financial package in less than one day in return for a commitment by Continental to invest more than $1.4 billion and creating 2,500 new careers. As a matter of fact, this project was ranked the number one economic development project in the Southeast by Southern Business and Development magazine. It took dedicated teamwork from Gov. Bryant, MDA and the legislature to the local leaders and economic development organizations in Hinds County to bring this project to fruition.”
McCullough said other significant economic development wins with existing and new companies in 2016 included furniture manufacturer Southern Motion creating 600 jobs with an expansion in Lee County. In October, MDA announced a new joint venture between Praxair and GE Aviation called PG Technologies in Jones County. Greenwood’s Milwaukee Tool announced in July the company’s second expansion in the past two years creating 75 new jobs. Seemann Composites is expanding the company’s Gulfport operations by creating 75 new jobs to accommodate a contract with the U.S. Navy.
“We believe our continued focus on improving the lives of all Mississippians through job creation and corporate investment will create stronger communities throughout the state,” McCullough said. “In Mississippi, we win with people. We have the right leaders in place, and the sky is the limit.”
Mississippi’s economy isn’t growing like gangbusters by any means. State Economist Dr. Darrin Webb forecasts growth of 1.6 percent in 2017, which is close to the 1.5 percent growth experienced in 2016.
“That’s a slow growth rate in terms of long-term history but, frankly, it is an improvement relative to what we have experienced in most years since the Great Recession,” Webb said. “According to the Bureau of Economic Analysis, the state experienced 0.5 percent growth in 2015. This was on the heels of two consecutive years of decline. The year 2016 will be the first year we have had two consecutive years of positive real GDP growth since 2008.”
He is expecting the 2017 economy will be very much like the 2016 economy.
“Our last official forecast was released before the election,” Webb said. “We will release a new forecast in January. I expect the numbers will change a bit. But the general story will remain the same–that is the 2017 economy will exhibit continued modest growth.”
But there are a lot of unknowns with a new president in office. Webb sees reason for guarded optimism in some of the proposals being discussed under a Trump presidency.
“Corporate tax reform has support on both sides of the aisle and could lead to increased investment,” Webb said. “There also appears to be widespread support for some form of an infrastructure spending bill. Unlike previous spending bills, an infrastructure bill would typically have a less negative impact on private investment. The real impact of either of these proposals, however, is not likely to show up until late 2017 at the earliest. Perhaps indirectly there could be some earlier gains from rising optimism at the prospect of stronger future growth, much as we are seeing in the stock market.”
There are also some areas of concern.
“The president-elect has indicated a willingness to impose punitive tariffs on companies relocating offshore,” Webb said. “He has similarly expressed interest in other measures which diminish free trade. In the long run, that is a losing proposition for the U.S. economy. I don’t believe, however, that these measures have widespread support.”
MDA Division of Tourism Director D. Craig Ray expects 2017 to be a banner year for tourism with the state celebrating the 200th anniversary of becoming the 20th state to join the union. Ray said the Mississippi Bicentennial is generating a lot of enthusiasm.
“There will be many Bicentennial celebrations and events that will promote tourism in Mississippi, but also celebrate our 200-year anniversary,” Ray said. “Local communities can apply for grants to have events. There is a grant application deadline the first of each month for appropriating dollars throughout the year for events selected.
“We are very excited about that. That will be really wonderful for the communities. We received 11 grant applications in the first month. It is an opportunity to celebrate in own community and state, and share your message by advertising and marketing of your history, your present and your future. It is a great opportunity for all those categories.”
More information is available at www.ms200.org.
Ray is also optimistic about some “game changers” for international tourism, which has already been on the upswing. More international travelers coming to the South. Starting in March British Airways will begin non-stop flights from London, England, to New Orleans Condor Airlines will begin non-stop service from Frankfurt, Germany, to New Orleans in May. The four flights a week should bring in about 70,000 to 75,000 passengers this next year directly into New Orleans.
“This will really help our international market in Mississippi,” Ray said. “Our number one market for international travel is Canada. The number two and three markets are England and Germany.
“Most international travelers will hit two or three states using New Orleans as a hub,” Ray said. “Many of those travelers coming into New Orleans will be visiting the Delta for our great culinary and musical experiences. They are likely to visit attractions such as the Blues Trail, the B.B. King Museum, and the new Grammy Museum Mississippi. International visitors are good travelers. They average two to three weeks for their vacation. They stay longer and experience more. International tourism has been building for some time and we are proud it will be even bigger in 2017.”
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