A good possibility region will outpace the nation in job and population growth, Wilmington Trust official says
By: Lauren Otis
Economic growth appears to be poised for a cooling-off period nationally, but there is a good possibility that Mercer County will outpace the nation in job and population growth, a senior economist at Wilmington Trust said.
Robert J. Christian, executive vice president and chief economist at Wilmington Trust, gave his prognosis for the nation, and the region, recently at the 2007 Mercer County Economic Summit.
Mr. Christian told an audience of well over 100 at the Friend Center on the Princeton University campus that nationally, "economic growth will be less robust in the next 12 months versus the last 12 months." However, "Mercer County is likely to be at least as strong as the U.S. growth rate" and quite likely higher, he said.
Historically, Mercer County jobs and population growth have been at a higher rate than the nation as a whole, and this trend should continue, Mr. Christian said.
Mr. Christian did not paint a rosy picture of near-term economic prospects.
"We are beginning to see cracks in economic growth and those cracks will be addressed by the federal reserve by lowering interest rates," he said. Inflation should stay where it is, he said, at around 2.5 to 3 percent.
Although a crisis in the subprime mortgage industry is grabbing headlines, Mr. Christian said there is a broader malaise in the home loan industry. Both regionally and nationally, mortgage holders who purchased variable rate mortgages in droves in recent years 30 percent of home purchases in the past three years involved such mortgages, according to Mr. Christian are now having to dip into savings to pay for increasing mortgage costs in the wake of interest rate increases, he said. "Variable rate mortgages are going to get worse before they get better," he said.
Over-leveraged consumers will then cut back other spending, thus dragging economic growth, Mr. Christian said. The increase in corporate profits, which grew by 30 percent last year, is not likely to continue, he added. While not insulated from such forces, Mercer County’s workforce and business community should weather the slowdown more smoothly than other communities, he said.
Mercer County Executive Brian M. Hughes, also addressed summit attendees, telling them that with all of the region’s resources education institutions, biotechnology businesses, a large hospital industry, and more "we’ve got so much possibility in the region and this county."
Mr. Hughes said county government was seeking to further strengthen the business climate, through responsible practices of its own.
"Mercer County needs to be run in a fiscally responsible way and that’s what we’ve tried to do in this administration," he said.