US recession covers all regions, but the effects on each one vary

The recession is striking all sections of the United States, according to the Conference Board's regional economic forum. The current slump is centered in the nation's industrial economy. The country's industrial heartland, with its heavy concentration of durable-goods manufacturing, will experience losses of output and jobs exceeding the national average this year. But the decline in the industrial arc, which reaches from Wisconsin to New Jersey, may not be as severe, relative to the rest of the country, as during past recessions. The reason is that such cyclical industries as steel and autos are becoming less important in this area.

The country's agricultural regions are having their own severe setback this year, which is likely to continue into 1981.

The downturn will also affect the fast-growing Southwest and Rocky Mountain regions, although these areas won't see outright declines in economic activity. Geographical regions continue to differ substantially in their industrial structure and in the strength of their longer-term growth trends, and these differences ensure differences in the effects of national recessions.

In some parts of the country a national recession shows up not as a shrinkage in jobs and production but a slowdown in growth. For a fast-growing region, however, the slowdown sometimes marks a deviation from the normal trend that is every bit as significant as the outright declines traditionally associated with recession and felt in the older industrial regions. In this way, no region is recession-proof.

The Pacific area will perform at least as well as the nation as a whole in 1980 and 1981. A major reason is that the Pacific states continue to be only modestly dependent on heavy manufacturing.

New England is expected to weather the recession considerably better than it did the 1973-75 slump. Two main reasons are cited:

1. New England is no longer a declining economic region.

2. Autos, steel, rubber, and residential construction -- the most troubled industreis this time -- are less important in this region than they are nationally.

The Southeast, hard hit in the last recession, is also expected to do at least as well as the nation as a whole during this downturn. Two major imbalances that contributed to the Southeast's tailspin during the last recession -- widespread over- building and high inventories in the critical textile industry (the largest manufacturing industry in Georgia and the Carolinas) -- are not present now.

The agricultural economy's deep recession is causing distress in America's breadbasket -- a vast region stretching from North Dakota to Texas and from Indiana to Alabama.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.