The outlook by regions

Nation's Business, Jan, 1998

In Pennsylvania, bright spots of growth are appearing outside Philadelphia and Pittsburgh, in places such as Allentown, Scranton, and York. Says Russ Sheldon, senior economist at Pittsburgh's Mellon Bank: "Some of our lowest-cost cities are doing very well."

SOUTH ATLANTIC 4.4% 3.1%

The South Atlantic region is mixed Job loss continues in the apparel industry, especially in North Carolina, although "the worst of the blood bath is over," says Gary Shoesmith, director of the Center for Economic Studies at Wake Forest University in Winston-Salem, N.C.

Virginia's growth is being led by expansion in the northern sectors that border Washington, D.C., even though the capital remains in financial straits.

George is coming back after a post-1996 Olympics slump. Florida is booming with increased tourism and a larger role in international trade as Latin American markets expand.

Says Lynn Reaser, chief economist with Barnett Banks Inc. in Jacksonville, Fla.; "Florida will probably be one of the strong states in the nation and will lead the Southeast in 1998."

EAST SOUTH CENTRAL 3.4% 2.2%

Job growth is below the national average, partly because of a loss of many textile jobs. John Logan, executive vice president for investment at First American National Bank of Nashville, Tenn., says that although the North American Free Trade Agreement has helped other regions, "it's looking like the Mid-South has been hard-hit by the effects of NAFTA."

Tennessee saw little job growth during most of 1997 and is now finding home construction pushing ahead of demand, says Al DePrince, a professor of economics and finance at Middle Tennessee State University in Murfresboro. "We'll begin seeing excess capacity in the housing market," he says.

Kentucky bordering on three Great Lakes states, continues to have strong job growth.