West and South Leading the US Recovery As Northeast Lags, Private Survey Shows
THE United States economy appears to be at a cyclical turning point and the main question is not whether it will emerge from recession but when and to what extent, an economic survey said yesterday.The Conference Board, a private business research organization, said attention is focused on the timing and magnitude of the recovery. The West and South appear to be leading the recovery, with the Northeast lagging behind. Although recession has been "relatively severe" in California, the West is now experiencing "determined optimism" despite a short-term downturn and longer-term restructuring. The West's recovery is expected to be propelled by continued job growth and increased trade with the Pacific Rim, the Conference Board said in its quarterly Regional Economies and Markets letter. The South Atlantic region, composed of Virginia, West Virginia, Maryland, and Washington, D.C., continues to outperform the nation. And the South-Central states of Kentucky, Tennessee, Alabama, and Mississippi will see a sharp recovery coinciding with the national recovery, the board said. State budgets appear to be in better shape in this region than in other parts of the country. The Rocky Mountain states will also see early growth, spurred by low housing costs and a favorable business climate. The region is also likely to attract firms leaving the higher-cost Pacific and Midwestern states. In the North Central area of Minnesota, Iowa, Montana, North and South Dakota, Nebraska, and Kansas, employment growth is above the national average. Personal income growth was the highest of all major US regions in the final quarter of 1990. New England's economy is showing signs of stabilizing but is not likely to recover fully from the recession in the near future, the group said. Consumer confidence in New England has waned since March and remains lower than anywhere else in the country. But the first-quarter fall in oil prices has helped because New England is the nation's largest per capita user of heating oil. Problems persist in the near Southwestern states of Texas, Oklahoma, Louisiana, and Arkansas where depressed oil and gas prices and slumps in manufacturing, banking, real estate and construction continue to retard recovery, the group said. However, a relatively high degree of consumer optimism suggests that efforts to diversify from the energy-based economy of the 1980s are beginning to pay off. Also struggling are the Central states of Michigan, Ohio, and Indiana, whose recovery is likely to follow the national recovery.