Hard Knock Lives
Envy Takes a Holiday
Maximum Security
Dave Duhl has had a taste of the reality that sometimes belies the facade of optimism radiated by many business owners.
“There is a lot more fretting out there than I thought,” said Duhl, owner of Sullivan Co., a promotional products company in Westerville that employs 21. “A lot of people put on a public face that is positive, but once you get them one on one, a lot of guys are struggling just to meet payroll.”
The economy is in trouble, has been in trouble for nearly two years, and a growing consensus agrees it’s likely to remain weak for years.
“There is less demand for pretty much everything now in the private sector,” said Gerry Bird, chairman of Gahanna-based Bird Houk Collaborative, which has seen commercial volume drop 75 percent in the past year.
Like many, Bird Houk is facing what has been dubbed “the new normal.” The phrase broadly describes the repercussions of a downturn that is so deep and entrenched that a return to pre-recession spending and economic growth is likely a long time coming. For Bird, the new normal has meant job cuts, a changed approach to doing business and taking the longer view.
“A year and a half ago, people wrote off 2009 and said once we get to 2010, things will come back,” he said. “Now people are looking at 2011, 2012 and as far as 2013.”
The long haul
While there is debate over whether the new normal will be short-lived or more lasting – think decades – there is no doubt that the economic slowdown has settled in for awhile.
“Depression babies were scarred for life and they had a different savings mentality and a greater dependence on themselves,” said Don Ratajczak, consulting economist for Memphis, Tennessee-based Morgan Keegan & Company Inc. “The big debate here is (if this is) traumatic enough to leave people permanently scarred, or just require a longer recovery.”
Ratajczak falls on the side of the optimists, though he sounds pessimistic.
“We will get back to full employment, but it will take six to eight years,” he said. “If that is true, then I think this is a long illness without permanent scars.”
The American economy has lost an estimated 6.5 million jobs since the recession began in December 2007, quickly pushing the nation’s unemployment rate to 9.5 percent in June. A year earlier joblessness stood at 5.5 percent.
The initial economic shock from the downturn has faded, but the plunge was steep enough to essentially obliterate recent notions that recessions were more easily controlled, said PNC Financial Services Group Inc. Senior Economist Robert Dye. Instead, this recession will be the longest since the Great Depression and likely will reshape modern thinking about downturns, he said.
“We’re no longer fooling ourselves into thinking recessions are only short and shallow now,” Dye said.
While many businesses made the bulk of their operational and job cuts last fall and early 2009, executives remain braced for prolonged difficulties, he said.
“Businesses that want to survive this kind of major recession need to plan accordingly” and in a way many haven’t done for decades, Dye said.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.




