N.H. economy gives businesses reason for optimism
Is the economy really bouncing back?Jasen Stock may have put it best, even if he was only talking about the lumber industry."There is some improvement and stability there," said the executive director of the New Hampshire Timberland Owners Association. "The sense is we may have hit bottom, but we are afraid to admit it. The fear is if you admit it, you will find a new low."But John Rice, president of the New Hampshire Association of Realtors, is not as reluctant to admit it, after seeing the "dramatic" rise of home sales this year. The year 2012 will be "when the tide turned," he said.But most economists are less eager to admit the bottom's been hit.While nationally the unemployment rate rose a tick in May, to 8.2 percent, New Hampshire's jobless rate is 5 percent, the sixth-lowest rate in the nation, unchanged from April (representing a loss of 410 jobs, actually) and less than a half a percent better than last year.But in the North Country, the April figure was as high as 10.4 percent (in the Colebrook area), 9.2 percent (Berlin area) and 8.4 percent (Coos County)."The first six months are very disappointing," said Russ Thibeault, an economist with Applied Economic Research in Laconia. "It looked like we were getting some forward momentum. It's not robust. It's kind of flat, kind of blah."So why does Donna Goodrich, president of Top Furniture in Gorham -- in the heart of the depressed North Country -- have that smile in her voice?"We just had a tent sale, and it was a great weekend," she said. Some of that is due to hiring at the new federal prison, but mostly "it's a bit more relaxed. Real estate is starting to flip. It is really nice to see."And Jason Lyon, CEO of the Common Man Family of Restaurants, is knocking down walls, and adding meal hours in several restaurants, in order to fit everyone in who wants to eat out."We can't find enough help," he said. "If there are some individuals among that 5 percent who want to work, please step forward."Exports picture"Honestly, I don't believe what the stats are telling us," said Dennis Delay, economist at the New Hampshire Center for Public Policy Studies in Concord.Delay said he's heard from business owners who tell a different, more positive story -- including small manufacturers in the state who tell him they have more business than they can handle.But there is a bigger reason for his skepticism: Thanks to a recent change, job numbers are sent by each state to Washington, where they are adjusted to "make the numbers jibe."This isn't as insidious as it sounds, he said. The numbers are estimates to begin with -- from a poll based on a select group of employers, then seasonally adjusted. The new procedure is one more adjustment.The result, though, he said is that "the feds are undercounting the amount of growth in New Hampshire economy."There are other numbers to back up his theory. Wages in the manufacturing sector are up, Delay said. And employers don't pay workers more unless they have more trouble getting them. And then there are numbers that are not estimates and are very telling.Initial unemployment claims dropped in May by 25 percent from April, and are at a level that's almost half the amount they were at the beginning of the year. Continued claims dipped below 40,000 in May, more than 10,000 below last May or April.So what's going on? Is it exports? Not this year. In the darkest days of the recession, exports kept the New Hampshire economy alive, jumping 43 percent in 2010. That number held relatively steady in 2011, but so far through April, exports have fallen by almost a quarter.Justin Oslowski, director of the state's Export Assistance Center, thinks that might be partly due to the turmoil in Europe -- exports to England have fallen 36 percent and to troubled Spain, they are down 46 percent. But the biggest drop has been to Mexico, nearly 50 percent.But Oslowski said the drop in exports might be a positive indicator."When things are tough domestically, people tend to look internationally. Now that the economy might be coming back, people might be focusing domestically," he said.Even so, exports pumped $1.2 billion into the state's economy in the first third of 2012, and Oslowski doesn't want local businesses to pass that money up. This year, the center is targeting the aerospace industry, one of the state's hidden secrets, ranging from high-tech manufacturers like EPTAM Plastics in Northfield to small resellers like Kiepura Aviation in Littleton, which supplies adhesives to such companies as Boeing and Airbus.All are benefiting from the long-overdue upswing in the airline industry."The world population is growing and people have to fly," summed up Marjan Kiepura, who moved the company up from the New York City area in 1996 for its better quality of life.To show what else the state has to offer, the export center will be joining a northern New England mission to an air show in England and to another air show in Montreal in September.Housing paceCanadian trade has been a thorn in the side of state's wood industry, but this year marks a bit of a turnaround, according to Stock of the Timberland Owners Association.A depressed housing market was glutted because of a white pine beetle infestation in British Columbia, leaving forests with dried dead trees that had to be harvested quickly. But the sawmills could not handle the load, and some literally exploded thanks to airborne sawdust catching fire. That put the mills out of commission, providing an opening for mills in New England.But that isn't the only reason New England lumber is moving. The housing market is finally coming back, both locally and nationally -- new construction and remodeling -- Stock said.Stock said the recovery hasn't been across the board, more like a "polka dot wood market." And while the "weird" weather has made wood harvesting difficult, on the whole it has been quite an improvement over the last few years, said Stock.That the housing market has shown signs of life is no longer in question. Rice recites the eye-popping numbers.Sales were up 20 percent in January compared to a year ago, 13 percent in February, 17 percent in March, 21 percent in April and 28 percent in May. That adds up to more than a fifth over last year's pace.Prices are still dropping slightly -- 3.5 percent over the course of the year and 2.4 percent in May -- but six counties have seen an increase, especially good news for Coos, where prices have risen 8.6 percent for the year and 21.9 percent in May compared to last year.More importantly, said Rice, who works at Sotheby's International Realty on the Seacoast, "I'm actually feeling this shift in activity, rather than seeing it on a data sheet."He said things are really picking up on the Seacoast, where a "popularly priced" home sells for between $200,000 and $400,000. If it is good shape and in a good location, it is going to get multiple offers, he said."Today's buyers have confidence in the market," Rice said. "It is pretty obvious. I can't say everything is over, but it's nice not to worry about when the next paycheck is coming and that Realtors can actually make a living doing this."And there are signs of life in the homebuilding industry. Some 613 permits were filed in the first four months of the year -- a 16 percent increase over the first third of 2011. That's a far cry from the more than 2,000 permits filed at the start of 2005, but a lot better than the 443 filed in the first third of 2009.Commercial, institutional and highway contractors are increasingly optimistic as well, said Gary Abbott, executive vice president of the Associated General Contractors of New Hampshire. The state will be taking out a $100 million bond to help widen Interstate 93. The U.S. Department of Labor is going ahead with the Job Corps center in Manchester. And the school building moratorium has been lifted, though it looks like much of the money will be used to reimburse school districts for projects already under way."It's still very competitive," said Abbott, noting that one small project at University of New Hampshire attracted 27 bidders. "When you see that, there aren't enough projects for all the firms in the industry."Retail and tourismThere is also a bit more commercial work, including of course all the work involved in the construction of the newly opened Merrimack Premium Outlets.The shopping center -- some 410,000 square feet, housing 100 outlet stores -- was mobbed when it opened on June 14, forcing the state to declare a traffic advisory. Bringing the sophistication of such stores as Saks Fifth Avenue and Bloomingdale's outlets to sleepy Merrimack creates a shopping destination that has resulted in 800 jobs. And that's after Lord and Taylor opened in March at the Mall at Rockingham Park in Salem.Despite the new draws, the old malls say they have not felt any drop in traffic."It's business as usual," said Vin Cosco, general manager of the Pheasant Lane Mall in Nashua. Cosco was hoping for a little more business than usual after putting $10 million into a major renovation.Nancy Kyle of the Retail Merchants Association of New Hampshire said she is expecting the new shopping magnets will attract more business from Canada. Ottawa has increased the duty-free limit from $50 to $200 for a single day and up to $800 for a stay of more than 48 hours (up from the previous cap of $400 for a weeklong stay), which will enable Canadian shoppers to buy more on each trip.With the exchange rate about even, Canada's high sales tax, price differentials and cheaper U.S. gas prices, this is the "perfect storm," Kyle said, creating "a surge in Canadian shoppers this summer."Of course, the tourism industry won't mind a Canadian surge either. The state Division of Travel and Tourism Development recently hosted a weeklong tour by Canadian journalists to bolster any Canadian invasion. But so far, the state has been doing quite well, even during the snowless winter. Despite a 47.5 percent decrease in snow cover compared to last winter, visits were up 0.6 percent and spending was up 3.4 percent, according to the New Hampshire Visitor Barometer compiled by the Institute for New Hampshire Studies at Plymouth State University.Rooms and meals tax revenues through April rose 2.5 percent last year. That's the same figure by which room occupancy increased during that period, according to figures from the New Hampshire Lodging and Restaurant Association, which also reported that room revenue was up by 8.1 percent.The Institute for New Hampshire Studies agrees, predicting some 13.6 million visitors this summer - 2 percent more than last year. And they're expected to spend about $1.82 billion, up 5 percent from a year ago.The visitors are already coming, said Tom Boucher, CEO of Great NH Restaurants Inc. (which includes T-Bones, Cactus Jack's and the new Copper Door in Bedford).Last year was the company's best year since 2007, and so far this year has been even better, said Boucher. Bike Week sales were up 8 percent, and the week after was up 10 percent. The weather has helped, but Boucher also credits a rebounding economy."Don't listen to the national news," he said. "New Hampshire is doing all right."