8/5/2009 6:00:00 PM Barbour predicts
slow recovery
out of recession
By T.J. JERNIGAN Staff Reporter
Although research and assessments show that the nation's economy is starting to bottom out, Gov. Haley Barbour said it may be a while before Mississippians really begin to see recovery.
"I'm afraid the nation is going to stay in a recession a while longer," Barbour said. "It is not deepening as much as it was, but I don't see it turning around."
He said a recent assessment done by Mackenzie and Company showed that the economy is starting to bottom out and that it could be months or maybe even next year before improvement is seen.
"If you look at recessions since 1974, you will see in an almost linear manner that it takes longer for employment to get back to where it was with each recession. This recession has been going on for a year and a half and employment continues to drop at a pretty serious rate. The economy may be bottoming out, but unemployment continues to rise."
The governor said most of Mississippi's economic troubles are directly related to the national economy, citing the effect of the weak housing industry on Mississippi businesses like the furniture and forest products industry.
While Mississippi has only had a bit of a housing slump, the state is still affected by the national housing crisis because of the effect it has on the industries in Mississippi that are related to the market.
He said a turnaround will not come quickly and very serious budget problems could loom for Mississippi beginning in Fiscal Year 2011 and becoming much worse in 2012.
"Despite the fact that state revenue was nearly $390 million below the estimate and about 4 percent below the previous year's revenue, spending for the current fiscal year is at record levels - more than $6.1 billion. This while it is virtually certain that state revenue will go down even more in this fiscal year."
Barbour said that on a local level, people should look into expanding businesses that already exist in their cities and towns by knowing the comparative advantages for industries that are "in the neighborhood."
He added that some businesses have expanded because a mother company closed down and brought jobs here.
"We should also be taking advantage of the soft labor market to try to encourage people back into workforce development and skills training so as the economy turns, we've got the labor supply and our people who lost jobs will be qualified to get better, higher paying jobs."
