Mississippi economy shrank 0.8 percent in 2011

JACKSON — Mississippi dipped back into recession in 2011, with overall economic output shrinking 0.8 percent, according to federal figures released Tuesday.

It was one of only six states where the economy contracted in 2011, along with Alabama, Hawaii, Maine, New Jersey and Wyoming.

Mississippi’s gross domestic product, all the goods and services produced by the private and public sectors, fell to $84.3 billion. That remained below the peak of $87.1 billion in 2007. The figures are measured in 2005 dollars to cancel out inflation. Mississippi’s economy was worth $97.8 billion in 2011 without the adjustment.

“We knew we were close to recession, but to see that the numbers were negative, that was a little surprising,” said Marianne Hill, an economist for the state’s College Board.

It was clear in the second and third quarters of 2011, though, that Mississippi’s economy was quite weak, based on the indicators that the College Board monitors.

Many measures improved noticeably in the final three months of 2011. But payroll employment numbers remain basically flat compared to a year ago. In April, Mississippi was among seven states where payroll totals were lower than a year earlier. That raised the question whether Mississippi remains in recession today.

“I would say the growth rate would probably be under 1 percent,” Hill said. “I think slow growth is more likely than negative growth.”

The state remains 70,000 jobs short of the pre-recession peak in payroll employment.

Mississippi recorded the lowest per capita economic output among the states, at $28,293 per person in 2011, compared to a national average of $42,070.

Mississippi lagged the nation in a wide range of economic sectors last year, but the biggest negative turned out to be the state’s agriculture, forestry and fishing sector. Output from farmers, loggers and fishermen fell enough to drive the state’s total output down by 0.46 percentage points.

Clifford Woodruff, an economist for the federal Bureau of Economic Analysis, said that Mississippi farms didn’t see their revenues increase as much as farmers nationwide.

The utility sector dragged the overall economy down by 0.25 percentage points. Woodruff said that judgment was based on declines shown by preliminary wage data.

Nationwide, manufacturing of long-lasting goods such as steel, cars, ships, machinery and furniture was an important engine of growth. That sector expanded in Mississippi, but much more slowly. Manufacturing of short-lasting goods such as food, chemicals, gasoline, paper, clothing contracted in Mississippi, while holding steady nationwide.

Aiding the state economy, but lagging far behind growth in other states was Mississippi’s professional, scientific and technical service sector. Hill said that sector is a small part of Mississippi’s economy, and can’t make a very big contribution to overall growth no matter how fast it expands.

Overall, Mississippi performed worse than all but Wyoming. That state’s economy contracted 1.2 percent. North Dakota grew fastest at 7.6 percent, thanks to an oil boom.

There was one silver lining: Mississippi’s growth rate for 2010 was revised up from 1.1 percent to 2.2 percent. The contraction from the recession year of 2009 was revised to be worse than earlier believed, negative 4.6 percent compared to the previous negative 2.1 percent.