Report finds signs of slowing Southeast Missouri economy

A rising unemployment rate indicates a slowdown in Southeast Missouri's economy, according to the latest newsletter from the Center of Economic and Business Research at Southeast Missouri State University.

While data from April to June indicates total employment rose by nearly 2 percent from the previous quarter and unemployment decreased by almost a percentage point, those statistics are deceiving, said center director Bruce Domazlicky.

He said employment normally increases during the second quarter because of seasonal factors such as homeowners and businesses needing more workers for construction and home repair. By comparing total employment in Southeast Missouri to the second quarter in 2007, that increase is 0.2 percent.

Additionally, Domazlicky said the unemployment rate is 6 percent, 0.7 percent higher than the second quarter in 2007.

"As anyone knows, when unemployment goes up the local economy is impacted," Domazlicky said. "And in Cape Girardeau County we have a good mix of industries such as higher education and health care that are able to ride out recessions. Industries such as automobiles and appliances may have a harder time making it."

Mirrors national average

Unemployment figures show the region is not immune to economic difficulties the rest of the nation is facing, Domazlicky said. He added that the unemployment rate mirrors the national average of 6.1 percent.

Perry and Cape Girardeau counties had the lowest second-quarter unemployment rates among 24 counties in Southeast Missouri, with Perry at 4.1 and Cape Girardeau at 4.4. Bollinger County's unemployment rate was 6.7 percent while 5.9 percent of workers in Scott County were unemployed.

Washington County suffered the highest unemployment rate in the region at 9.1 percent.

Among those Southeast Missouri businesses that recently announced cutbacks were Havco Wood Products and Thorngate Ltd. On Aug. 1, Havco Wood Products said it was reducing the work force at its Cape Girardeau plant by 60 full-time and 11 temporary employees. And two weeks ago, Cape Girardeau clothing manufacturer Thorngate Ltd. announced the elimination of about 250 jobs in the sewing department.

Many industries

Larry Tucker, executive director of the Perry County Economic Development Authority, said Perry County's unemployment rate is the lowest in Southeast Missouri because of the number of jobs available for its residents. Among the county's largest employers are TG Missouri Corp., whose 1,147 employees produce steering wheels and plastic auto parts, and Gilster-Mary Lee Corp., whose 1,100 employees make cereal, cake mix and popcorn.

"By having such a large number of industries, we have a good number of employees who drive in from outside the county that it drives up our daytime population and traffic dramatically," he said. "And that in turn increases the revenue generated from their expenditures on gas and food."

Domazlicky said residents in Southeast Missouri are cautious about spending and he expects that to be reflected when second-quarter sales tax data is released. He said some indications are that sales tax receipts are slowing and turning negative in some cases. With little or no growth, Domazlicky said the downturn more than likely will hurt local government budgets in the next six to 12 months.

"When retail sales are down, that means less revenue for governments to use for programs," he said. "That will in turn force governments to make decisions on how they spend less money in the best way they see fit."

bblackwell@semissourian.com

335-6611, extension 137

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