|6/20/2007 - Jackson, Miss.
The June issue of Mississippi Economic Review and Outlook, published by the Center for Policy Research and Planning of the Institutions of Higher Learning (IHL), is now available online at www.mississippi.edu/URC.html. Highlights include:
· Mississippi Economic Outlook. “The cost of rebuilding and repairing the 39,000 individual homes near the coast with major damage is a manageable one, at less than $3 billion. The state, in fact, has received over $5 billion devoted specifically to housing, and insurance payments and other funds can also assist residents,” says IHL Senior Economist Dr. Marianne Hill, the article’s author. “However, the construction of hurricane-safe housing with moderate insurance costs is not proceeding as rapidly as the construction of casinos and high-end condominiums.” The high cost of insuring traditional homes is a key reason for the delay. A supplemental table, showing data on building permits, provides additional insight into the Coastal housing market. In other state economic news, numbers are turning upwards. Construction on five major investment projects of $400 million or more will begin within the year. Employment in the first quarter was a strong 2.2 percent higher than in the first quarter of 2006; and state revenues, although not growing as rapidly as last year, continue to climb.
· National Economic Outlook. The national economy continues to feel the effects of the downturn in the housing market. The strong world economy, however, has boosted U.S. export growth. This has improved the U.S. trade balance and will enable the growth rate of the national economy to stay slightly above 2 percent for the year. Problems in the housing market, particularly in the sub-prime mortgage market, will continue throughout 2007, but by 2008 housing starts will begin to turn up and the growth rate of gross domestic product will again approach 3 percent.
· Trends in Mississippi Earnings. A study by IHL Senior Economist Dr. Darrin Webb shows that, from 1990 to 2005, the state out-performed the nation in the arts/entertainment/recreation industry and in accommodation/food services industry. Growth in other industries has been uneven, with manufacturing continuing to shrink. Overall, “Mississippi nearly matched the average growth in earnings of the nation,” but, Webb warns, this might not be the case in the coming period if the knowledge gap with the rest of the nation is not narrowed.
· Mississippi High School Outcomes. Research continues to confirm that an area’s economic and community development is closely tied to the health of its secondary school system. This article attempts to gauge the health of Mississippi’s secondary school districts by providing data on dropout rates and performance levels by school district, as well as data on expenditures per average daily student attendance. These data are summarized in a map estimating the achievement level by county. Ten counties are found to be under-performing; 53 counties are found to be successful; and 19 counties are found to be exemplary. No counties were found to be low-performing or superior-performing.
· Economic Impact Multipliers. Proponents of a particular event, activity, or industry have been known to claim that every dollar spent on their event will turn over seven times, thus having an economic impact multiplier of seven. However, IHL Planning Economist Dr. Bob Neal explains that economic multipliers are typically below two; “they are not seven.” Multipliers today average 5 to 10 percent lower than ten years ago, he notes, due to the increasing globalization of business, which has brought an increase in purchases from out-of-state. Estimates for Mississippi’s economic impact multipliers are given.
For more information, contact Dr. Marianne Hill, senior economist, at (601) 432-6376. The full text of Mississippi Economic Review and Outlook is available at www.mississippi.edu/URC.html.