Business

Has the Coast’s economy fully recovered since Hurricane Katrina?

The Promenade shopping center in D'Iberville provided a huge boost to the city's tax base after Hurricane Katrina.
The Promenade shopping center in D'Iberville provided a huge boost to the city's tax base after Hurricane Katrina. jcfitzhugh@sunherald.com File

The few dozen business analysts who carefully track the economic numbers for South Mississippi probably know how the Coast economy is performing in 2017 and how it compares numbers before Hurricane Katrina, but most residents don’t.

June numbers, the latest available, show sales tax collections are up, casino revenue is down, unemployment is low, and new and existing housing sales are booming on the Coast.

More passengers are traveling through Gulfport-Biloxi International Airport and new flights to Orlando are expected to increase those numbers.

Ingalls Shipbuilding is having a banner year and people are spending more when they go out to eat in Ocean Springs. New hotels, restaurants and other businesses are under construction across all three Coast counties. But there’s still talk of the need for more family-friendly attractions that will entice tourists to stay longer and spend more at local businesses, said Ashley Edwards, executive of the Gulf Coast Business Council.

“Certainly the strength of the national economy is starting to trickle down to local economic confidence,” Edwards said. In the Business Council’s most recent survey of CEOs on the Coast, “We had some of the highest economic confidence numbers we’ve seen in the 6-7 years of doing the survey,” he said. Membership and revenue dropped at the Business Council during the Great Recession, but he said, “We reversed that trend last year and saw a membership increase.”

Generally consumers in South Mississippi respond to what happens in the national economy, he said, even if it doesn’t reflect local conditions.

People often talk about how the Coast economy was booming in 2005 before Hurricane Katrina hit. There was nowhere to go but up after that, Edwards said. Since then, the Coast economy was hurt by the Great Recession, which didn’t hit the Coast until September 2009. Then the oil spill in 2010 added more challenges, along with casino competition and changes in the ways people shop and spend money.

Leading the charge

Six new mayors in 12 cities across the Coast are learning about what the economic numbers mean in their towns and how they can seize opportunities.

“We have a good economic development plan,” said Pascagoula Mayor Dane Maxwell, one of those new mayors. His is one of two cities along with neighboring Gautier whose sales tax diversion was down in the state’s last fiscal year. Pascagoula received $76,000 less in the year from July 2016 through June 2017. But Maxwell said they have a plan — and 47 action items — which he said is probably more than the last four administrations and councils combined.

New businesses are opening on Market Street and coming from the business incubator, he said. New condos will be built on the waterfront and Maxwell met this week with investors who want to develop residential areas in three parts of the city. Pascagoula is working with the Jackson County Economic Development Foundation, he said. As a more grass-roots effort to be pro-business, he and council will introduce the Business Spotlight at the Aug. 15 council meeting, taking time to announce business highlights in the city.

“We are Pascagoula, and we want to make sure we are supporting our local economy by supporting our local businesses,” Maxwell said.

By the numbers

Here’s how the Coast economy is performing by sector:

▪  Gulfport-Biloxi International Airport passengers are up 7 percent this year, said executive director Clay Williams, and June numbers showed a 7.6 increase over last year. Total passengers are 329,087 through June compared to 306,773 for the first half of 2016, an increase of 23,000. Allegiant Air on Aug. 30 begins service to and from Orlando-Sanford on Wednesdays and Saturdays. Sun Country’s seasonal service to and from Minneapolis-St. Paul runs from Aug. 31 through mid-December. “That’s been good service for us the last couple of seasons,” Williams said, since Coast residents can go shopping at Mall of America and enjoy the flaming foliage and cooler weather. Minnesota residents have some of the highest number of golfers in the country, he said, and can extend summer on the Coast.

▪  Sales tax diversions to the cities in this last state fiscal year through June 30 reached $62 million, or $9 million more than the $53 million total in 2005. Diamondhead was incorporated after Katrina and had $560,000 in sales tax revenue last year, so the remaining $8.5 million increase went to other cities. D’Iberville added the most retail and had the biggest gains in those 12 years of $3.8 million, followed by Gulfport at $2.9 million and Ocean Springs at $1.2 million. Biloxi, Long Beach and Pascagoula remain below pre-Katrina numbers. Back in 2005, Gulfport’s annual tax diversion was $18 million, while the other Harrison County cities of Biloxi, D’Iberville, Long Beach and Pass Christian had $19 million combined revenue. Twelve years later, Gulfport expanded to $21 million while the other five cities combined reached $22.6 million.

▪  Casino revenue was strong at the Coast casinos before Hurricane Katrina hit in 2005, surpassing $100 million every month. Once the casinos reopened, revenue soared to a record $1.3 billion in 2008 when construction workers and volunteers increased the population. The boom was dashed by the national recession and revenue at South Mississippi’s casinos has climbed every year since 2013. The casinos have some catching up to do if they are going to surpass last year’s numbers, since revenue is behind by $4.6 million for the first six months of 2017.

▪  Unemployment is down and jobs are on the increase. June’s unemployment was down across all three Coast counties compared to the same month in 2016, standing at 6.2 percent in Hancock County, 5.7 percent in Harrison County and 6.9 percent in Jackson County. The rates continue to be above the national average. As South Mississippi business leaders work to diversify the economy, the tourism, hospitality and food services industries had the strongest positive growth in the last decade, and in some cases outperformed comparable tourism markets in the region, said Edwards. But he said the Coast needs jobs in high-paying industries. In May, the Coast showed an increase of 800 jobs, and about 700 of them were in Jackson County. Since Katrina, fewer people are working in the Gulfport, Biloxi, Pascagoula Metropolitan Statistical Area, down to 155,380 at the end of 2016 compared to 163,970 at the end of 2004 and 157,510 four months after Katrina in 2005.

▪  Housing sales have improved steadily since 2010, when the average sales price on the Coast was just $115,000, according the Mississippi Gulf Coast Multiple Listing Service. Those who waited until this year to sell their home on average were paid $153,000, or $38,000 more. Realtors also have seen their commissions grow in volume. The number of properties sold in South Mississippi more than doubled to 2,593 for the first six months this year compared to 1,255 in the first half of 2011. Jerry Creel, Biloxi’s community development director, said more than 100 new homes are under construction in the city, including several on or near Beach Boulevard.

▪  Hotels are making a comeback. Many of the hotels that were destroyed during Hurricane Katrina were single-story, family-owned hotels. The casino hotels were the first to reopen, but now visitors have more options on where to stay with boutique hotels opening in downtowns and chain hotels near the Gulfport Sportsplex and the airport. Biloxi has three hotels under construction at the beach. Visit MS Gulf Coast reports that occupancy at casino hotels is at 96 percent for the first half of this year and for all hotels is at 81 percent.

Ocean Springs restaurant tax

Diversions to city (state fiscal year July 1-June 30)

2016/2017

2015/2016

Difference

$1,300,292

$1,266,504

$33,788

Mississippi Department of Revenue

Casino revenue

January-June 2017

January-June 2016

January-June 2015

$602 million

$606 million

$580 million

Mississippi Department of Revenue

Coast home sales

Jan.-June 2017

Jan.-June 2016

Difference

Average sales price

$152,445

$143,916

+ $8,529

Homes sold

2,543

2,264

+ 279

Mississippi Gulf Coast MLS

Sales tax

Diversions to cities, for fiscal years July 1-June 30

FY 17

FY 16

Difference

Bay St. Louis

$1,511,209

$1,474,868

$36,341

Biloxi

$12,528,167

$11,720,153

$808,014

D’Iberville

$7,331,787

$7,269,737

$62,050

Diamondhead

$564,283

$554,912

$9,371

Gautier

$2,258,956

$2,260,840

-$1,884

Gulfport

$20,899,113

$20,666,638

$232,475

Long Beach

$1,411,711

$1,364,627

$47,084

Moss Point

$1,853,083

$1,809,744

$43,339

Ocean Springs

$4,989,418

$4,940,127

$49,291

Pascagoula

$5,237,796

$5,314,240

-$76,444

Pass Christian

$1,373,662

$1,275,847

$97,815

Waveland

$2,435,601

$2,356,860

$78,741

Total

$62,394,786

$61,008,593

$1,386,193

Source: Mississippi Department of Revenue

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