Members of the Home Builders Association of North Mississippi gathered at the Whispering Woods Conference Center in Olive Branch for lunch and to hear an update on the state’s economy Thursday.
Corey Miller, Chief State Economist of Mississippi, spoke about the state of the state and national economies at the meeting. Labor shortages, labor trends, and the recently passed Bill 531, also known as the Mississippi Tax Freedom Act of 2022, were highlighted by Miller.
“We didn’t have that many people in the workforce before the pandemic,” Miller said. “COVID-19 seems to be in the rearview mirror. In terms of the economy, at least for now, inflation is currently the highest in several decades. Mississippi’s economy continues to rebound from the 2020 recession. It was a very steep but also very brief recession.
Miller said Mississippi has been growing since the fourth quarter of last year at 4.1% at an annualized rate.
“For all of 2021, the Bureau of Economic Analysis reported that our real GDP (gross domestic product) grew 4.4% for the state,” Miller explained. “That’s the most we’ve had in the state since I believe 1995.”
Miller said projections show the state is slowly recovering from the COVID pandemic and the 2020 recession at a slow pace. He also presented slides showing the employment sectors that suffered the most during and after the pandemic.
“The hardest hit sectors are the service sectors,” Miller explained. “Areas with a lot of face-to-face interaction, a lot of personal contact, those were the hardest hit. These are a smaller part of Mississippi’s economy. We have more in traditional sectors like manufacturing and agriculture.
Miller later said the government sector was also one of the largest employment sectors in Mississippi with 9,000 positions currently vacant in the state.
Mark Utley, Jr., with Utley Properties, hosted the program and said the association experiences its share of labor shortages.
“Labour continues to be a challenge, especially skilled labor, tradespeople, electricians, carpenters and plumbers,” Utley said. “Those seem to be the three we really need. This is from what I’ve seen and heard from other builders. We will continue to build as the demand is always high for the construction of houses to meet the demand. Although we will have to work with our suppliers and subcontractors to manage longer than usual lead times. We are fortunate to have partners in the trades.
The association, whose main office is in Southaven, includes Tate, Marshal and DeSoto counties as well as the Tupelo area. Utley said the greatest need for skilled workers comes from DeSoto County.
“With DeSoto, you have more (home construction) and permits taken away than any of these other counties,” Utley said.
The Mississippi Tax Freedom Act of 2022, which passed in January, gradually lowers the percentage on the household income tax rate.
“Our office had done a little analysis of this bill. It’s a lot simpler than initially debated,” Miller said. “In the 2023 tax year, the 4% personal income tax bracket will be eliminated. This is the 4% tax on the second $5,000 of taxable income of a Then, in 2024, the 5% personal income tax rule, on taxable income over $10,000, will be reduced to 4.7% In 2025, this rate will be reduced again to 4.4%, in 2026 to 4% This is essentially the bill.
Miller said his office predicted a decline in state revenue by 2032 of $531,715,409.
Utley is in favor of lowering the tax rate for Mississippi households.
“We think the state income tax cut is a very good thing for DeSoto County, being a border county of Tennessee and Memphis,” Utley said. “We think this will help northern Mississippi.”
Utley added that despite the labor shortage, the association is doing well and is even planning its annual spring event.
“The association is growing, we have a golf tournament on April 29 at Wedgewood (Country Club), The Bob Williams Classic,” Utley said. “We have more events coming up, everyone can follow us on social media for more updates.”