Southpoint

Last week marked the second gathering of the Atlanta Fed's Local Economic Analysis and Research Network (LEARN). We discussed three of the presentations in our previous post. This time around we'll discuss the other lectures from our conference.

Mississippi's outlook was presented by state economist and assistant commissioner of institutional research for the Mississippi State Institutions of Higher Learning, Dr. Philip Pepper. He noted that although the state felt the brunt of the recession later than most states in the region, its recovery will closely track that of the nation as a whole. That said, Dr. Pepper highlighted the fact that average growth during economic expansions has decelerated over time, and that he felt that growth in the United States and Mississippi will be below the long-term average for the foreseeable future. Job growth in particular will be anemic in Mississippi, he reported, and state revenue growth will be slow coming out of the recession as consumers remained cautious.

Dr. Dek Terrell from Louisiana State University's (LSU) Division of Economic Development and Forecasting noted that Louisiana also was a latecomer to the recession and has not suffered as much as other Southeastern states. Job losses began in the spring of 2009 but have mounted since. The inflow of federal dollars and rebuilding from Hurricane Katrina helped stem the recession's tide for a while, and the state's energy sector held up well, mainly because of industrial construction related to the petrochemical industry.

Also from LSU, Dr. David Dismukes, associate director and professor at the Center for Energy Studies, shared with conference participants how the expansion of the natural gas sector has benefited Louisiana's economy. The discovery and extraction of new gas resources have been the result of the application of new technologies, Dr. Dismukes said. A total of $2.4 billion in new business sales in Louisiana in 2008 were created by Haynesville Shale activity, resulting in approximately $3.9 billion in additional household earnings (much of this from lease and royalty payments) and 32,742 jobs.

Georgia's outlook was not as rosy, according to Dr. Jeffrey Humphreys, director of the Simon S. Selig, Jr. Center for Economic Growth at the University of Georgia. He noted that Georgia will continue to suffer from its heavy exposure to the real estate downturn. The economy is geared toward new residential and nonresidential development. Going into this recession, Georgia had an outsized construction industry and a huge supply of residential and nonresidential properties and a high concentration of manufacturing industries closely allied to construction. The overdependence on development meant the financial crisis did much more damage to Georgia's banks than to the nation's. Dr. Humphreys concluded that Georgia's economy will underperform the national economy until real estate and construction stabilize, sometime in 2011.

Presentations from the LEARN conference can be found on our Web site.