ECONOMIST EXPECTS SLOW GROWTH

CAPE GIRARDEAU -- Cape Girardeau County's gross regional product is expected to be the same this year as last, an economist at Southeast Missouri State University said.

Dr. Bruce Domazlicky, associate professor of economics, said growth in Cape County is likely to be affected by a sluggish forecast for the Gross National Product, the nation's measure of the production of goods and services. The GNP is expected to show almost no growth in 1991.

"More uncertainty than usual attends this year's forecast," Domazlicky said. "The events in the Persian Gulf, including the length of the war, the effect on oil prices and other intangibles could dramatically change the forecast."

Domazlicky said a sharp rise in the price of oil would prove troublesome for both the local and national economy.

"Most sectors would be adversely affected by the resulting higher energy costs. Inflation would likely be significantly higher as well. Such uncertainty is always difficult for the economy and for business planning," he said.

Cape County's total production in 1991 is expected to be $1.1 billion worth of goods and services. The economist said the figure will be the same as the 1990 amount after adjusting for anticipated inflation of about 4.5 percent.

Domazlicky said most sectors in the economy are expected to experience little growth during the first half of 1991, with some recovery occurring in the last six months of the year.

"For the entire year only the manufacturing sector is likely to show a decline. The other sectors, retail trade, services and finance, will end the year with modest increases in output," he said.

On the bright side, total employment in the county should increase by about 300 jobs for the year, reaching 40,500 by the end of 1991, he said. However, unemployment in the region, which stood at 4 percent in November, could climb as high as 6.5 percent before declining late in the summer.

Domazlicky prepared the 1991 forecast using the Cape Girardeau Econometric Forecasting Model (CAGEFORM), a 40-equation mathematical model which represents the structure of the local economy.