Leading Economist Makes Predictions

Increased defense spending will bring more business to Ingalls, the tourism industry will endure a tough first half of the year, and there's more trouble ahead for Mississippi farmers.

Those predictions are from one of the country's leading economists, who was the keynote speaker at a USM business conference in Biloxi Friday.

Dr. Donald Ratajczak also says the country is not headed for recession, despite the recent downturn in economic indicators.

"You have to go down to enough depth that it clearly is felt as significant weakness."

Donald Ratajczak discussed the economy with a group of coast business leaders.  He talks a lot about the "R" word these days. But the economist doesn't believe America is on the verge of recession.

He told coast business leaders the economy should bounce back after a slow first quarter. As for the tourism that helps drive the coast economy, the first half of the year will be rough. But the outlook is favorable.

"You are getting destination traffic pickup and the demographics are favoring that move. So long term it's a positive. Maybe the first half of the year might be a little bit troublesome, but I would expect by the second half of the year you would already be seeing improving trends."

He believes shipyard workers will soon have reason to celebrate. The Bush administration will likely move toward an increased level of defense spending. But it won't happen overnight.

"The Bush administration is moving slowly here. They're doing a review. Probably anything that workers at Ingalls could cheer about won't surface this year. It's probably a next year event."

Mississippi lawmakers were both praised and taken to task for the enticement package that lured the Nissan plant to our state. Ratajczak says such enticements are a part of doing business.

"I still think you're going to have to have some enticements to get some big plants. I don't think you're going to just say, this is Mississippi and please come. They're going to say, well, what's your package? And it's going to have to be competitive."

And this economist says the business world is beginning to recognize that Mississippi is becoming competitive.