State Economist Phil Pepper told lawmakers Thursday that Mississippi’s housing market continues to be strong, despite a slowdown in housing markets nationwide.

Pepper spoke to the 14-member Joint Legislative Budget Committee, which is starting to shape a state government spending plan for the year that starts next July 1.

He said the national economy is slowing. Manufacturing jobs are down nationally over the past year, and in Mississippi they are down about 15 percent.

The Gulf Coast is showing a strong rebound from Katrina because of a massive influx of federal dollars and insurance payments that are reaching the area 13 months after the storm.

State revenues looked solid through the first three months the current fiscal year, Pepper said. They were $32 million ahead of estimates July and August, and September was $29 million above projections with three days left in the month.

Retail sales are doing very well in the state, led by the six southernmost counties and DeSoto, Rankin, Madison and Oktibbeha counties.

Pepper said the recovery from Katrina will help fuel the economy in the state for several years. However, he said the state has a “weakness” because of a high school dropout rate of about 40 percent.

House Education Chairman Cecil Brown, D-Jackson, said the state needs more school attendance officers because they’re carrying a heavy caseload. Also, some school districts don’t fully report their dropouts because it affects the attendance figures which determine how much state funding they receive.

The Budget Committee and Gov. Haley Barbour will meet in late October to set a projected revenue growth rate for the coming budget year.