Joblessness in Missouri weighs hard on economy

JEFFERSON CITY, Mo. -- With job losses topping 77,000, Missouri's economy is still reeling from a recession that has hit harder here than in many other places, state officials said Wednesday.

Missouri's work force shrunk by 2.83 percent from March 2001, when a national recession began, through October -- the third largest decline nationally behind only Georgia and Delaware.

The driving force has been a steady announcement of layoffs in manufacturing industries, although nearly all employment sectors are down, the Department of Economic Development said while releasing its first update on the state economy since last April.

"Clearly, we in Missouri are still being affected by the national recession," said state Economic Development Director Joe Driskill.

Unlike in April, when he forecast an improved economy by summer's end, Driskill gave no indication when things would be looking up.

"Any recovery will likely have trouble getting established, and we're going to experience some ups and downs before we have prolonged growth here in Missouri," Driskill said. "In the meantime, people will be out of jobs, many businesses will struggle to get by, and communities and state government will continue to see stagnant -- if not declining -- budget revenues."

The Missouri Chamber of Commerce President Dan Mehan called the latest state job loss figures "very alarming news,

"It's very disturbing that the trend continues," Mehan said. "We're one of the leaders in the nation in this category of job loss, and obviously we have some problems in the state."

Driskill said Missouri's economic downturn has spanned 19 months -- longer than the recessions of either 1982 or 1990-1991. Whether the current downturn is worse than the previous ones depends on what factors are used in the interpretation, he said.

The state evaluates the economy based on four factors -- employment, personal income, industrial vitality and retail sales.

Net employment declined by 77,700 jobs over the 19-month period running through October. That includes a 10.6 percent decline in manufacturing jobs -- above the national average of 8.3 percent, the Economic Development Department said.

The largest industry losses were in business services, electronics, communications and special trade contractors. The bulk of the job losses came from mid-sized and smaller employers.

Underscoring Missouri's woes, Sprint Corp. announced more layoffs Wednesday in the Kansas City area. Charter Communications Inc., based in the St. Louis area, announced layoffs Tuesday. Those announcements have yet to be included in the state's job loss totals.

In other economic indicators, Missourians' personal income grew at 0.4 percent between the first and second quarters of 2002 -- slower than the national rate of 1.1 percent. Over the previous few quarters, Missouri's performance had been as good or slightly better than the national rate.

State sales tax collections -- another economic indicator -- also are down compared to the previous fiscal year, which saw only scant growth in sales tax revenue.

Democratic Gov. Bob Holden has proposed the elimination of up to $100 million in what he describes as business "tax loopholes" as a way to increase state revenue.

Driskill said he didn't expect that to have much of a negative impact on the state's economy.

But Mehan described Holden's plan as a business tax increase "that would make Missouri that much more unattractive to locate a business in."