By ALAN SAYRE - Dec 30, 2010 10:14 AM ET By The Associated Press
Struggling back from the Great Recession has been a hard road for Mississippi. And although there are bright spots in the works for 2011 and beyond, economic forecasts say the state's recovery will be a yearslong process — provided another national slowdown is not in the works.
From February 2008 to October 2010, Mississippi lost about 71,000 jobs, or 5.8 percent of its work force, according to state economist Darrin Webb.
At the same time, though, the Mississippi Development Authority, armed with government expansion and relocation incentives, said in a recent report that it attracted commitments for $1.53 billion in new business investment to the state in 2010 with the promise of just over 6,400 new jobs.
And 2011 is the year Mississippi's second major auto manufacturing plant is scheduled to open. Toyota's plant near Blue Springs is expected to have an initial payroll of 1,000, eventually growing to 2,000. Along with that, auto suppliers are expected to add another 1,500 to 2,000 jobs.
But the difference between the list of new jobs and the number that have disappeared illustrates how deep the downturn has been for the state. According to a recent forecast by the state Institutions for Higher Learning, Mississippi likely won't reach its record employment — set in 2000 — until at least 2015.
"This economy has just taken a terrible hit from this recession," Webb said.
The 2015 job recovery forecast is based on an annual job growth rate of about 1.4 to 1.5 percent — a figure that Mississippi hasn't hit since 1999, Webb said.
Nationally, much of the recovery focus has been on breaking the stubbornly high unemployment rate, which economists say will get consumers spending again. But Webb said he doesn't expect an overnight change in the new tightfisted habits of buyers anytime soon.
"Obviously, jobs are the big problem," Webb said. "On the spending side, the consumer that exited this recession is totally different from the one who entered it. Before, he was willing to spend his home equity on his vacation. Now, he's much more frugal. We don't expect the consumer to change that attitude anytime soon."
Another national problem is the collapse of housing. Although Mississippi ranks near the bottom of foreclosure rates, the state has seen a 62 percent decline in housing starts since the period just before Hurricane Katrina in 2005, Webb said.
"Our current level is back to where it was in 1991," he said. "That will continue to be a drain, a weight on our neck."
The IHL forecast says Mississippi likely will lag behind national employment growth, partly because government already accounts for about 23 percent of total employment and the state's health care and professional sectors are below the national average. Still, the health care and professional sectors are expected to outstrip the average with annual growth rates of 2.7 percent and 2.3 percent.
The Mississippi Development Authority, the state's economic development agency, reported a much stronger 2010 in terms of attracting new businesses and expanding existing companies. The agency said it obtained commitments for $1.53 billion in investment and 6,370 new jobs. The value of projects nabbed in the first three quarters exceeded the annual total of 2009.
The authority's executive director, Gray Swoope, said he expects tougher competition between states for new jobs, especially as funding for economic development is lined up in tight government budgets. A money-pressed state could hurt its competitive position by approving tax increases, he said.
"We've continued to make economic development a priority," Swoope said. "Other states will have to question their funding. That will be a competitive advantage for those states who make economic development a priority."
Swoope credited incentives approved by the Legislature in 2010 for three clean energy manufacturing projects committing to Mississippi: Twin Creeks Technologies, a solar technology company planning 512 jobs in Tate County; KiOR, which plans five biofuels production plants in Mississippi with as many as 1,000 jobs; and Soladigm, which is planning 300 jobs in DeSoto County. Soladigm said it will produce glass that can be quickly switched from clear to tinted as an energy-saving measure.
One key economic driver — the tourism-casino industry — likely will see its growth lag behind other sectors, managing only an annual growth rate of less than 1 percent through 2015, according to the state forecast.
"It's such a slow recovery, it will be a while before people are spending again on vacations," said Marianne Hill, senior economist for the IHL.