Is the recession over? We asked locals in business what they think
| Thursday, Sep 10 2009 05:24 PM
Last Updated Thursday, Sep 10 2009 05:29 PM
Just ask, and everyone has an opinion on the economy.
And some will say there are signs it's getting better.
Here's what Associated Press reporter Jeannie Aversa wrote: "The recession is ending and the economy is finally growing again. That's the message implicit in the Federal Reserve's latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions. Economists warn the expansion is fragile and will have staying power only if consumers start spending more money."
The Federal Reserve report out Wednesday said, "Economic activity in the Twelfth District (a large region that includes California) showed continued scattered signs of firming but appeared to be little changed on net during the reporting period of late July through the end of August."
But what's happening in Bakersfield? We asked people in several sectors of the economy. Here are the answers we received Thursday:
Nance Fillmore, real estate agent, Fillmore Realty:
The recovery is slow and its path may be precarious, but we are seeing positive signs.
With homes presently so affordable, the real estate community is, once again, dealing with multiple offers on properties. Many families can qualify and with the $8,000 tax incentive and historically low interest rates, there is no better time to buy.
We may be experiencing a continuation of foreclosures and short sales, but also we have sellers who are now willing to accept the market and are pricing their homes appropriately.
Realtors are pressing for the tax incentive to be extended, and should the government choose to do so, it will further stimulate local housing sales.
Rick Smoot, founder and co-owner of Too Fat Sandwiches:
I do not believe that the current recession is over but I do feel that it has hit bottom. In the past few months we have noticed a fairly consistent trend in our sales. Although they are not where we would like them to be, they are slowly improving.
It seems that consumers are being very careful with how they are spending their discretionary funds. I know I am. In my line of work, fast food, this has really worked to the advantage of the spender. Every eating establishment that my family and I go to is offering specials and incentive programs to lure in new and repeat business. I know that we have and will continue to try to find new ways to increase traffic at our stores.
Just about all the business owners I speak with are of the same mindset that I am: Cut any unnecessary expenses and hunker down until things start to improve and be thankful for what business you do have. If I had to guess when things will improve it would be early 2010. I think it will be a slow process but eventually we'll get there.
Matt Towery, president of Towery Homes:
From my perspective, it could go either way. We had a little comeback after we were able to get our prices close to where the foreclosures were. Once we were able to do that, sales began to go up again toward the end of last year.
We also got a lot of help from the $10,000 state tax credit for new homes, and the federal $8,000 tax credit. But those tax incentives are expiring, and now we have the new traffic impact fees we're having to pay which is pushing up prices, so these are still iffy times for us.
Richard Chapman, president and CEO, Kern Economic Development Corp.:
In terms of KEDC's level of business development activity, we are seeing some signs that the worst may be over. However, the answer should become obvious within the next 60 to 90 days, since the months of August and September are traditionally the peak employment periods of our agriculture- and energy-based economy. The current job market stagnation resembles an "L" curve, and we are in a "holding pattern" -- neither gaining nor losing further jobs.
Fortunately, for Kern County, the economic downturn has not been nearly as bad as it has for most regions throughout the state and United States. While Kern has shed about 2 percent of its employment base since last summer, California and the United States have lost 4.5 percent and 4 percent of their respective job bases.
Indeed, IHS Global Insight recently projected that Kern County would be the first county in the state and one of seven counties in the nation to return to pre-recession employment in the next two years.
Daniel Petrey, CFO and CCO, Mestmaker & Petrey Wealth Advisors, Inc.:
Technically the recession may be over, but the better question might be what the recovery will look like? We are already starting to hear rumblings of a "jobless recovery" on the financial channels such as CNBC. If the recession is over and the recovery is referred to as jobless, then we are still in an economically weak environment.
This appears to be indicating that a recovery will be slow to develop. Since consumers make up a large portion of our economy, jobs are pretty important to any type of economic recovery. If there are still worries of being laid off, then consumers will tighten their purse strings and any recovery will be hindered by a lack of enthusiastic shoppers.
