Concord’s Economic Forecast

Better times are coming

by Linda A. Thompson-Odum

Hold on until 2011. That was the expert consensus at the recent 2010 Economic Forecast luncheon hosted by the Greater Concord Chamber of Commerce. This year’s annual event focused on the local economic picture in comparison to national trends, which show that New Hampshire fared better in this recession than the country overall.

“We do this sort of event every year,” Chamber president Timothy Sink said. “In the past we’ve had speakers such as a person from the Federal Reserve. This year we wanted to do it differently. We invited core economists to look at the local economy from an industry perspective. What industries project signs of the economy? Banking, real estate, employment, and the stock market. They provide a sense of where the economy is going in the next 12 months, which helps business plan for the future.”

Addressing Unemployment

Unemployment was the common theme for the event. Annette Nielsen, economist with the New Hampshire Department of Employment Security, said there are 50,000 unemployed in the state, and the rate had doubled in this recession to 7 percent. “New Hampshire’s unemployment rate has risen during this current recession, but remains below the national average.”

While large company layoffs caught the media’s attention in 2008 and 2009, for Nielsen’s department, the lack of hiring in the state is a bigger concern than curtailing layoffs. The state’s top four employers are retail, government, health care, and manufacturing. She said, “What’s going on now is no one is hiring. Very few industries were able to gain jobs, primarily just government and health care. Top in openings is retail jobs.” Then she added, “It’s hard to pinpoint where the new jobs will be.”

Higher unemployment had an impact on the commercial real estate in the state. William Norton, president of Norton Asset Management, noted that when unemployment is high, occupancy numbers in real estate go down, as do property values. He also said, “The question is, when is unemployment going to change and when are we going to hit bottom? We’re not going to have companies with 500 employees moving into New Hampshire. We are going to have to do this one or two employees at a time.”

Lending and Credit

Unemployment wasn’t the only area where New Hampshire trended better than the rest of the nation. Gerald Little, president of the New Hampshire Bankers Association, noted that, nationally, credit extended by banks to commercial borrowers decreased by 16 percent, while in this state it only dropped by 6 percent. A study done by PolEcon Research for the Association showed that banks headquartered in this state actually increased the amount of their commercial and industrial loans. The decrease came from banks headquartered outside of the state and credit card companies.

The Stock Market

Chairman Steven Albrecht of Charter Trust Company noted stock market trends are more reminiscent to previous recessions the country went through, such as the recession of 1972, than the Great Depression, as some people feared. He said inflation currently isn’t a problem, but should be watched, and he predicted the stock market would grow by 10 percent in the next 12 to 18 months. “Consumers are avoiding credit and paying off debt, saving, and repairing their balance sheets. That’s not necessarily good for the short term, but it is good for the long term,” he said.

Albrecht’s prediction mirrored everyone’s belief that the economy in 2010 would be flat, and then would start to show real growth the following year. Or as Norton said, “To get to heaven, you have to survive to ’11.”