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The Associated Press August 11, 2010, 8:06AM ET

Oil spill still leaves questions for coast economy

Mississippi's Gulf Coast economy has withstood the BP PLC oil spill better than originally anticipated, although the disaster's long-term effects remain a wild card, according to an economic study.

The Gulf Coast Business Council, in its quarterly report of April-through-June economic activity, presented a mixed picture of where the three-county economy is headed.

While the commercial and recreational fishing industries have been hit hard, measurable employment is remaining largely stable.

The report said that although fishing-related jobs cannot be quantified, there are just over 5,600 in-state residents working on oil spill cleanup duty. Many out-of-work fishermen have gone to work on the oil spill across the Gulf Coast.

The council said that overall employment - excluding fishing and the cleanup jobs - was down by 1.2 percent, or 1,830 jobs from the second quarter of 2009, but increased 2,210, or 1.4 percent, from the first quarter of 2010. Over the year, construction was the biggest loser with 2,100 jobs, while government-education, likely boosted by temporary Census workers, was the biggest gainer with 510.

From the first quarter of 2010, the leisure-hospitality sector was the biggest gainer, adding 1,200 jobs.

Future employment drivers, the council said, likely will include the Northrop Grumman Corp. shipyard at Pascagoula, which will get all of the company's Gulf Coast military shipbuilding following the closure of the Avondale, La. yard. Jackson County is building a training center for shipbuilding workers that can handle 1,000 students at a time.

Casino revenue - an important tourism driver - had its first second quarter-to-second quarter increase since 2007, albeit a tiny 0.18 percent. But the second quarter figure of $275 million in winnings was still down 14.6 percent from the pre-meltdown second quarter of 2008, according to the Mississippi Department of Revenue.

Long-term coastal casino revenue has been on the fall - even before the oil spill - because of the travel-cutting recession and increased competition for gambling dollars from Florida Indian reservation casinos.

In addition, after Hurricane Katrina hit Louisiana and Mississippi in 2005, wiping out the entire Mississippi coastal casino business, the remaining casinos in southeastern Louisiana experienced a huge boom, largely attributed to relief workers.

The business council also noted that hotel tax collections were up 29.3 percent in May from May 2009 - probably due to spill workers - but restaurant tax collections dropped 0.4 percent over the same period.

The business council said yet to be determined is the long-range effect of the oil spill on tourism, including negative perceptions by would-be visitors, regardless of how much the spill affects the region, the report said. Among tourism businesses, there are concerns "that the artificial stimulus provided via visiting BP and oil spill interests will not be replaced by lost visitors."

The council also said future commercial contracts in the second quarter of 2010 were up 20.4 percent from the same quarter of 2009, but still lagged 14.1 percent behind the pre-meltdown total in the second quarter of 2008. The latest large commercial contracts include a $36 million casino expansion and $11 million in Hancock County government buildings.

"As most of the Katrina-related construction projects are wrapping up, the outlook for the economy on the Mississippi Gulf Coast will increasingly rely upon private investment," the report said.

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