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BARNETT ECONOMISTS PREDICT RECOVERY WILL CONTINUE, BUT SLOWLY, IN 1992

BARNETT ECONOMISTS PREDICT RECOVERY WILL CONTINUE, BUT SLOWLY, IN 1992
 JACKSONVILLE, Fla., Dec. 23 /PRNewswire/ -- Economists at Barnett Bank, Florida's leading financial institution, predict that the recovery, which has temporarily stalled, will resume in the spring and that the economy will gain considerable momentum during the second half of 1992.
 "The worst of the recessionary news -- layoffs, industry consolidations, depressed construction -- is behind us," explained John Godfrey, Barnett's chief economist, in his 1992 economic forecast.
 The impact of Federal Reserve monetary policy -- lower interest rates and increased money growth -- will provide the stimulus to turn the economy around.
 "Both Florida and Georgia possess very favorable long-term prospects," Godfrey said.
 In-migration will pick up in 1992, as more people seek jobs and retire, and businesses continue to relocate in the two states, attracted by lower operating expenses and a large, trainable workforce, he noted.
 "In 1992, we will not see the declines in economic activity we've witnessed this year, but the recovery will be very gradual, just like a person's recovery from a serious injury," Godfrey said.
 NATIONAL OUTLOOK. The national economy is struggling, but the recovery will continue despite current year-end weakness. Some growth will resume in the first quarter and more strengthening should be apparent in the second half, with annual growth of about 2.5 percent. Key elements in Barnett's forecast:
 -- The consumer will be the key to the recovery.
 -- Low consumer confidence will continue to impact car and other big-ticket purchases in the first part of the year. Car sales are only expected to reach an 8-8.5 million unit level through the first half, but spending will strengthen as job and income prospects improve.
 -- Homebuilding will continue slowly to improve, but home sales are not likely to pick up until spring.
 -- Business investment also will not improve significantly until the recovery is further along.
 -- State and local government budgets will remain under pressure, with no improvement likely until the new fiscal year begins.
 -- Inflation will remain moderate by all measures, with the widely watched Consumer Price Index expected to rise only 3.5 percent in 1992.
 -- Short-term interest rates have largely bottomed out, as Federal Reserve actions to stimulate the economy begin to show results. Longer-term rates will continue to linger at higher levels because of concern about inflation.
 FLORIDA OUTLOOK. The good news is that most of the bad news is already out and the state's economy is adjusting. Florida will recover slowly, starting in the spring, but damage to the service sector as well as construction and tourism will take time to mend.
 Key elements in Barnett's forecast:
 -- In-migration of new residents, slowed to just 160,000 in 1991, but will revive to 190,000 in 1992, which will lift total population by nearly 300,000.
 -- Homebuilding is improving and layoffs in construction and retailing appear to have run their course.
 -- Tourism is showing some early signs of strengthening and total tourist arrivals are expected to rebound 3.5 percent to 42 million in 1992, following a 2.5 percent decline in 1991.
 -- Consumer income and spending, both weaker now due to job losses, will begin to recover in early 1992.
 -- While commercial properties will continue to be overbuilt, retail vacancy rates will show some improvement.
 GEORGIA OUTLOOK. Barnett expects improvement in the Georgia economy as well, driven by that state's attractive business climate, affordable housing, low land costs, low taxes and temperate climate.
 Atlanta has been tremendously successful in attracting major corporate and regional headquarters. Job growth should pick up sharply during the second half of 1992 as these firms staff up.
 With $32.3 billion in assets and 593 offices in Florida and Georgia, Barnett Banks, Inc. is Florida's largest financial institution and the 21st-largest in the United States. Its stock (BBI) is listed on the New York Stock Exchange.
 -0- 12/23/91
 /CONTACT: Bob Stickler of Barnett Banks, Inc., 904-791-5437 (office), or 904-396-9284 (home)/
 (BBI) CO: Barnett Banks, Inc. ST: Florida IN: FIN SU: ECO


JJ-SS -- FL008 -- 4900 12/23/91 14:50 EST
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Date:Dec 23, 1991
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