The Midstate economy has shown promising signs of recovery heading into 2013, but regulatory and policy-making uncertainty on the national stage continue to hinder sustained economic growth and threaten to reverse any economic momentum gained since the peak of the recession.

Those were among the insights offered during the annual MTSU Economic Outlook Conference held Friday inside the Embassy Suites Hotel and Conference Center. About 200 business and community leaders turned out to hear featured speakers address topics ranging from the importance of community banking to the prospects of the nation falling off the “fiscal cliff” because of political gridlock in Washington.

During his speech focused on community banks, Greg Gonzales, commissioner of Financial Institutions for the state of Tennessee, pointed to the rapid consolidation of banks nationally — four large banks control 40 percent of the assets — as a potential threat if the consolidation trend continues.

Gonzales said it’s important that federal and state regulators “not impose a once-size-fits-all model of supervision” of banks and instead strike a proper balance between ensuring banks follow financially sound practices and allowing banking officials to make business decisions that help foster small business growth.

During his presentation, David Penn, director of the MTSU Business and Economic Research Center, pointed to a significantly improving housing market overall for the Nashville metropolitan area, with single-family housing construction up 41 percent and home sales up 27 percent from a year ago. 

“Housing is the brightest spot in the Nashville market right now,” Penn said. “If I’ve said that at all, it hasn’t been since 2005.”

But he tempered that development with concern over a rising unemployment rate in recent months and several other key economic indicators that have either stagnated or headed in the wrong direction. 

Donald Ratajczak, nationally known economist and regent’s professor of economics emeritus at Georgia State University, gave a lunch-time presentation that pointed to five areas of uncertainty that could affect the national and global economy: the future of the euro; whether U.S. political leaders will address the coming “fiscal cliff” of tax breaks expiring and automatic deep spending cuts looming at year’s end; China’s economic slowdown; the drought’s impact on food prices; and an unbalanced U.S. fiscal policy of heavy Federal Reserve intervention and little to no action on the federal debt.

MTSU alumnus J.B. Baker, owner of Sprint Logistics and chairman of the board for Volunteer Express Inc. and Associated Companies, was presented the Jennings A. Jones Champion of Free Enterprise Award.

The Jennings A. Jones Chair of Excellence in Free Enterprise, the MTSU Business and Economic Research Center, and the Weatherford Chair of Finance co-sponsored the event.