Mississippi Economic Recover Dependent On National, International FactorsBy Jeffrey Hess | Published 27 Nov 2012 04:49pm |
Mississippi's economy is slowly growing out of recession, but that trend could be reversed by events a half a world away. MPB's Jeffrey Hess reports on how projections for economic growth in the state hinge on national and international events.
The economic forecasting company IHS Global Insight projects both the state and national economy to continue a slow recovery growing about 1-to-2 percent for a couple years before returning to higher growth rates.
But, says Greg Daco with IHS, that could depend on lawmakers in Washington avoiding a set of automatic tax hikes and spending cuts known as the 'fiscal cliff'.
"That would mean a recession for the US economy. And that would happen if you had the expiring of a number of tax cuts that would include the Bush tax cut and the payroll tax cut. If you raise taxes, basically you hamper private sector activity and that leads to weaker GDP growth," Daco said.
Daco says Mississippi also needs stability in Europe and China to continue a growth pattern.
Senior State Economist Derrin Webb says Mississippi's economy does not stand alone, and needs on global strength for continued growth.
"And I think also in particular our economy, Mississippi and the national economy, are growing at such a slow pace that shock. globally effect us more than they would otherwise. If we were growing at 3, 4, 5% than what happens in Europe may not affect us as much. But we are barely growing in Mississippi," Webb said.
If the country dodges those pot holes, IHS economist Daco says nearly 10-million new jobs could be created over the next four years with housing leading the way.
"We are starting to see early good signs from the number of starts being put in place. We are also seeing good signs in terms of existing home sales. And overall we are seeing signs of home prices increasing. That is a good thing for homeowners that had underwater mortgages," Daco said.
The same is true in Mississippi, where housing starts and sales are both up by double digit figures compared to a year ago.
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