Take heart, local businesses — economic watchdogs are starting to see trends that we might have hit bottom, or very close to it.
As the numbers start to roll in from the first quarter of 2009, it’s starting to paint a picture of things leveling out. Here are some of the reports from the last several months:
- Consumer confidence was flat (rose 0.7 percent) after steep declines in February. The Conference Board’s Expectations Index was up 1.6 percent from February.
- Wells-Fargo posted $3 billion in first quarter profits.
- The Federal Reserve’s Beige Book, which gathers anecdotal information from the Fed’s various districts, revealed that “several saw signs that activity in some sectors was stabilizing at a low level.”
- Jack Welch, CEO of GE, said while “business is flat,” investors no longer think things will go from bad to worse.
- JP Morgan Chase beat first quarter profit estimates and said it is ready to pay back $25 billion in Troubled Asset Relief Program funds received from the government.
- National housing activity is up due to low mortgage interest rates triggered when the Federal Reserve bought $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt.
- According to February wholesale trade numbers released in early April, sales of durable goods were up 2 percent over January; cars and related parts and supplies were up 3.7 percent over January.
- In February, the federal goods and services deficit shrank to $26 billion from $36.2 billion in January. Exports were up $2 billion and imports were down $8.2 billion.
The landscape that these numbers are painting is that we may well be seeing some stabilization in the economy. While we will likely hear several more months of layoff news, as businesses continue to shed jobs to make up for losses they are feeling now, there is hope that some of the leading economic factors will start a steady climb toward recovery. This would set us on track for a recovery by the end of this year or early next year.
So what does this mean for local businesses? Essentially, hang tight — continue to think lean and mean, but don’t stick your head in the ground. This is the time to position yourselves for a turnaround. Keep marketing yourselves in a smart, targeted way, and keep communication open with your employees. Any changes such as layoffs may be temporary, as businesses will need to rehire workers once customers return to more normal spending patterns.
We should also start seeing some more construction projects break ground, as lenders begin loosening up and funding larger projects. There are signs that this is happening already, as projects such as the Bellwether Gate on the waterfront get greenlighted and begin putting up cranes.
Everyone from banks to Wall Street seems to be coming to grips with the current downturn and are beginning to pick up the pieces. It’s time to start looking forward again.
by Rik Dalvit