An economist told Grafton County area business leaders on Wednesday that signs are pointing to an improvement of conditions, and that the state should be moving out of the recession in the coming year.
Russ Thibeault of Applied Economic Research of Laconia was the keynote speaker for the second annual Central New Hampshire Economic Forecast Forum and Luncheon held at the Common Man Inn of Plymouth. The sold-out event was jointly sponsored by the Waterville Valley Region Chamber of Commerce, the Squam Lakes Area Chamber of Commerce, the Newfound Area Chamber of Commerce the Plymouth Chamber of Commerce and the Baker Valley Chamber of Commerce.
“We’re in a tough position; things really haven’t begun to turn around. But in about a year the story will be different,” said Thibeault, who has been quoted in The Wall Street Journal and been featured on CNN.
DARYL CARLSON/CITIZEN PHOTO STATE SEN. Deb Reynolds and economist Russell Thibeault were keynote speakers at the second annual Central N.H. Economic Forecast Forum and Luncheon at the Common Man Inn in Plymouth Wednesday.
While Federal Reserve Chairman Ben Bernanke announced last Tuesday that the national recession was over, Thibeault told more than 100 business leaders from five chambers of commerce in Central New Hampshire that the Granite State was slower moving into the recession and will therefore be slower to come out.
Nationally we are still losing ground, according to Thibeault, but at a much more moderate rate. In the fourth quarter of 2009 negative growth was 6 percent and now, in the last quarter, it is negative 1.5 percent in comparison, he explained.
Nationally, about 6 million jobs have been lost this year, which is a record. But Thibeault said that those losses are now diminishing, that the trade deficit has improved considerably and that industrial production is up.
“Things are not good, but they are no longer deteriorating,” he said, citing the fact that retail sales have stabilized. “I’m not trying to over-spin this in a positive way. All the charts show consumer confidence is up.”
Inflation is flat and energy prices have declined, teaming up to keep interest rates low on the national level, he told attendees. While the actions of the Federal Reserve Board have been viewed as controversial by many, in Thibeault’s eyes their measures “helped prevent us from falling into the abyss.”
Mortgage rates are at historic lows — a key that has helped keep the economy chugging and is helping many first-time homebuyers into the market at a time when it is becoming cheaper to buy than it is to rent.
Nationally, the U.S. savings rate has risen from 4 percent to 5 percent and home sales are starting to move, helped in many instances by the first-time buyer $8,500 federal tax credit, Thibeault said.
In New Hampshire, unemployment is at a 30-year high of 50,000 workers, which is well below the national rate, he said, but we are still losing jobs.
Since the recession began we have lost 15,000 to 20,000 jobs, Thibeault added.
New Hampshire residential real estate sales have stabilized after a precipitous drop and the number of listings is on the decline, indicating a good market for buyers, he said.
Meanwhile some of the worst economic news is in foreclosures, which went from a pre-recession high of about 500 annually to 35,000 in 2008.
“There is a lot of heartache there,” Thibeault said.
In Grafton County, the economic news is positive. The unemployment rate is lower than both the state and national rate as a result of the large number of jobs in the health care segment coupled with work at Plymouth State University and in tourism.
While overall the growth rate is slower, he said, retail sales in Grafton County are growing faster than the state average.
“The biggest economic problem in this part of the state is not jobs but wages,” Thibeault said.
The average weekly wage in New Hampshire is just over $600, while it is $800 in the southern part of the state. If Grafton County could attract employers that paid those wages, Thibeault said, another $800,000 would be flowing through Central New Hampshire.
While the U.S. economy will be leveling out and a slow recovery is likely in the coming year, Thibeault said he expects New Hampshire will parallel the nation, but cautioned business leaders not to look for a quick replacement of the 15,000 jobs lost in the past year.
Regionally, he said the economy is more stable than that of the state and will also see more improvement over the coming 12 months, “but not a dramatic change.” The good news is that the median home price is 40 percent less expensive than at the real estate peak in 2005 and that opens the chance to buy a home to a much broader population of people, he concluded.
On the tourism front, Lori Harnois with the New Hampshire Division of Tourism and Travel Development said tourism remains the second largest industry in the state, despite the economic downturn.
Direct spending in New Hampshire by travelers during 2008 reached $4.51 billion, a 7.6 percent increase vs. 2006. Direct, indirect and induced impacts of this travel spending, she said, were more than $11.5 billion.
New Hampshire as a whole benefits from tourism, she noted, saying that traveler spending in fiscal year 2008 supported approximately 62,500 direct full-time and part-time jobs or about 9.2 percent of the state’s total. Meanwhile, $132.6 million in rooms and meals revenue during 2008 came from visitors to New Hampshire. This represents nearly three quarters of all rooms and meals receipts.
Collectively the White Mountains and the Lakes Region attract among the greatest traveler spending, outpaced only by the Merrimack Valley that has a larger population, according to Harnois.
By BEA LEWIS
Thursday, October 1, 2009