Sun Belt Takes Recovery Lead, Study Reports : Economy: The Northeast and North Central regions are reportedly lagging other parts of the country.

The Sun Belt regions of the South and West are outperforming the rest of the United States as the economy begins to rebound from a yearlong recession, according to a study released Sunday.

A quarterly study of regional economies and markets by the Conference Board, a business group, said the Northeast and North Central regions are lagging other parts of the country.

The study was based on an analysis of unemployment, help wanted ads, consumer confidence, personal income, housing starts and retail sales in each of nine regions.

The study said that while some of the South Atlantic states face budget problems, that area continues to thrive in comparison to other parts of the country, largely because of lower taxes and real estate costs.

State budgets in East Central states, such as Kentucky and Tennessee, are also in better shape because of fiscal tightening in the late 1980s. The study noted that employment did not decline as severely there as in other parts of the country.

The Rocky Mountain states are also benefiting from low housing costs and a favorable business climate and are expected to attract business from the higher-cost Pacific and Midwestern states.

In contrast, New England and East North Central states will likely lag.