THE ECONOMIC OUTLOOK FOR MISSISSIPPI

Phil PepperMississippi Institutions of Higher LearningPresentation to 2010 LEARN ConferenceMarch 29, 2010

2009 ECONOMIC STATS

Mississippi United States2009 Populations Estimate (US Census) 2,951,996 307,006,550

2009 Total Personal Income, Billions (US BEA) $88.9 $12,015.5

2009 Unemployment Rate (US BLS) 9.6% 9.3%

2009 Unemployment Rate U-4 (US BLS) 10.2% 9.7%

2008 Workforce Participation Rate, 16 yrs+ (US Census)

60.1% 66.0%

2008 Per Capita Income (US BEA) $30,103 $39,138

2

3

4

Mississippi Nonfarm Employment

Source: U.S. Bureau of Labor Statistics 5

1990

1990

1991

1991

1992

1992

1993

1994

1994

1995

1995

1996

1997

1997

1998

1998

1999

1999

2000

2001

2001

2002

2002

2003

2004

2004

2005

2005

2006

2006

800

850

900

950

1,000

1,050

1,100

1,150

1,200Chart Title

Thousands

1,160.6 May 00

1,108.3 Jun 03 1,085.5

Feb 10

1,159.0 Jan 08

6

Mississippi Employment by Major Industry Sector, 1990 - 2010

Source: U.S. Bureau of Labor Statistics

1990

1990

1991

1992

1992

1993

1994

1994

1995

1996

1996

1997

1998

1998

1999

2000

2000

2001

2002

2002

2003

2004

2004

2005

2006

2006

2007

2008

2008

2009

2010

130

180

230

280

330

380

430

MFG Trade, Trans. & Utilities Services Gov.

Th

ou

sa

nd

s o

f J

ob

s

7

19

60

19

63

19

66

19

69

19

72

19

75

19

78

19

81

19

84

19

87

19

90

19

93

19

96

19

99

20

02

20

05

20

08

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Source: U.S. Bureau of Economic Analysis and IHL.

AVERAGE ANNUAL GROWTH IN REAL GDP DURING PERIODS OF U.S. EXPANSION/CONTRACTION

Trough-To-Peak

8

SLOWING INCOME GROWTH IN THE US

Average Annual Growth In Real Total Personal Income

During Periods of U.S. Expansion

Mar

96

Sep 9

6

Mar

97

Sep 9

7

Mar

98

Sep 9

8

Mar

99

Sep 9

9

Mar

00

Sep 0

0

Mar

01

Sep 0

1

Mar

02

Sep 0

2

Mar

03

Sep 0

3

Mar

04

Sep 0

4

Mar

05

Sep 0

5

Mar

06

Sep 0

6

Mar

07

Sep 0

7

Mar

08

Sep 0

8

Mar

09

Sep-0

9

0

50

100

150

200

250

300

350

400

450

500 Chart Title

Millions o

f 2004 $

Source: U.S. Bureau of the Census

MISSISSIPPI REAL VALUE OF RESIDENTIAL BUILDING PERMITS

9

1010

WORKFORCE PARTICIPATION RATE

66%

68%

70%

72%

74%

76%

78%

80%

82%

84%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

US MS

Percentage of Population 18-64 in the Workforce

11

MS CONSUMERS ARE NOT SPENDING

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

$50,000,000

LoansDeposits

Source: FDIC

1212

SALES TAX TRANSFERS TRENDS1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010*-10%

-5%

0%

5%

10%

15%

20%

6.1%

2.4%3.5%

5.6%

12.3%

5.0%

1.4%

5.9%7.6%6.7%

4.6%

0.9%1.9%

1.7%

4.2%6.1%

17.2%

4.1%

0.9%

-1.3%

-9.5%

Fiscal Year

Red Bars Denote National Recessions: July 1990-March 1991; March 2001-November 2001; December 2007 – June

2009(Preliminary)

2010 Growth is the March Revised Estimate.

Transfers to the G.F. -- Growth Over Prior Year

1313

INDIVIDUAL INCOME TAX TRENDS1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010*-10%

-5%

0%

5%

10%

15%

20%

7.1%

10.4%

3.3%

15.1%

12.1%

8.1% 8.3%

6.7%

11.5%10.5%

3.2%2.9%

-3.8%

2.6%4.1%

9.8%

6.9%

18.4%

4.5%

-4.4%

-9.8%

Fiscal Year

Red Bars Denote National Recessions: July 1990-March 1991; March 2001-November 2001; December 2007 – June

2009(Preliminary)

2010 Growth is the March Revised Estimate.

Transfers to the G.F.-- Growth Over Prior Year

Red Bars Denote National Recessions: July 1990-March 1991; March 2001-November 2001; December 2007 – June 2009

(Preliminary). 2010 Growth is the March Revised Estimate.

GENERAL FUND TRENDS

14

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010*-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2.5%

5.1%

1.3%

9.1%

11.4%

9.7%

2.9%

5.9%6.5%

7.6%

2.8%2.1%

-2.1%

2.2%

4.0%

7.2%

12.8%

10.5%

3.1%

-4.2%

-6.3%

Fiscal Year

Transfers to the G.F.-- Growth Over Prior Year

15

GROWTH OVER PRIOR YEAR: WITHHOLDINGS AND GROSS RETAIL SALES TAX TRANSFERS

Jul

Sep

Nov

Jan-

09 Mar

May Ju

lSe

pNov

Jan-

10M

ar*

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Withholdings

March 2010 is preliminary

SUMMARY

Growth in the US and MS will be below the long-term average for the foreseeable future

Job growth in particular will be anemic in MS

State revenue growth will be slow with greater frequency of negative years

Restructuring of State verses Federal government -- politics, politics, politics

Education, Education, Education 16

17

Questionsor

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