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Economic Activity Report
September 2009
These are not great times for those of us in the field of economic development. I spend many hours reading and studying the various statistics, opinions and trends of the regional, State and Federal economies and it’s very difficult to find good news at any level. The bottom fell out of the national economy about a year ago and the impact is still working its way through almost every economic sector. Topping the list is housing which in some region, is still falling from its heights of two to three years ago. Some regions where there’s an overstock of new housing units such as in Florida, the prices are now 1/10 of what they were just two years ago. The story is very similar in manufacturing, although the decline in that sector has been going on for a much longer
period of time. It’s the manufacturing sector that concerns me the most since it’s that sector that has been the backbone of our local economy for the past one hundred years. Nationally, this is also the sector that has many industrial centers like Detroit on their knees with unemployment numbers in the 20% range. Here in Berlin and the region, we’re doing relatively well in spite of the negative forces of the national economy, but the outlook is bleak unless there’s a significant turn-around in the near future. I estimate that, as many as 50% of our local retailers are operating at a break-even point and, any further decline in activity will push many of them over the edge. What has softened the negative impact locally has been the construction of the Federal Prison and the fairly stable conditions experienced by many of our major employers.
Some may question how relevant tracking what’s going on at the national level may be or wonder why we should spend any time looking at the big picture. In my opinion, we can’t make intelligent decisions about what we should be doing locally without taking into account what’s going on in the rest of the country and the world. For example, with the significant decline in the manufacturing sector in the US as a whole, how much of our resources should we be investing in the infrastructure that supports that economic sector? For a hint of what the answer may be, we only need to look at the circumstances that have evolved in our own industrial park within the past year. A year ago all of our spaces were occupied and we were all looking forward to the construction
of a wood pellet plant and the construction of a 30,000sf distribution center. The scarcity of investment capital and the decline in the value of the American dollar caused these projects to be delayed or canceled. I believe that there’s a lesson to be learned by studying these events. There are some troubling indications that some of these negative economic conditions may be with us for an extended period of time and, the more pessimistic students of economics believe that conditions may further deteriorate before turning around.
It’s my personal belief that we would do well in taking a very conservative position with our assets, diversify our investments and be prepared to consider developing strategies to assist our local businesses survive these difficult times. This is not a time to do business as usual since the financial and economic circumstances have changed dramatically and will continue to change. It’s also my belief that the new economy that will emerge from the ruins of the past industrial period will be significantly different than what we’re familiar with. Our workers will need different skills and technology will be integrated in most business activities. I believe that in the future, connectivity, energy, sustainability, synergy and quality of life will dominate our
economic development conversations and efforts.
Norman Charest
Economic Development Director
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