Regional Report: Attacks' Effect on Regional Outlook --- Prospects Dim Across U.S., With Tourism States And Northeast Hit Hard
ECONOMIC RIPPLES from last week's terrorist attacks are being felt in all regions of the U.S. But the force of the impact will depend very much on where you live.</br></br>Among the hardest hit will be states and cities built on tourism, including Florida and Las Vegas. They were holding up best amid a slumping economy before the attacks. But now that air travel has been hobbled by security fears, sharply reduced visits by vacationers and business travelers have dimmed those economic bright spots.</br></br>A few regions may weather the storm better: oil-producing economies such as Houston and Louisiana; defense-contracting strongholds such as Southern California and northern Virginia; and areas where displaced Manhattan firms are setting up temporary or permanent offices, most notably New Jersey, which could gain as many as 100,000 jobs.</br></br>Still, few places, if any, will escape unscathed. "There is no part of the country whose outlook has not worsened," says Mark Vitner, economist for First Union Securities in Charlotte, N.C.</br></br>The impact of the attacks will whack from one to more than three percentage points off anticipated growth in output over the next nine months, depending on the region and whether the expected U.S. military response is relatively quickly resolved or protracted and uncertain. Overall, the U.S. gross national product -- the value of all goods and services produced -- would grow only 1.5% between the second quarters of 2001 and 2002 under the more optimistic scenario and contract 0.05% under the more pessimistic assumption, according to Economy.com, a West Chester, Pa., economic-consulting firm. That compares with a pre-attack forecast of 2.55% growth.