Economy is brightening, but clouds remain on the horizon

The recent bright, sunny, dry weather has certainly brightened people’s outlook. We all hope the positive outlook will lead to momentum for hiring and increased investment — both public and private. Brian Gotlob of PolEcon Research in Dover is projecting 10,000 to 14,000 jobs added by the end of 2010. That is 20 percent to 25 percent of the jobs we have lost – some 55,000 — but it is an improvement. It will take three to five years to gain all of those jobs back, but the good news is that we should not lose more jobs.This is not to say life is all roses. To quote Jeff Thredgold of Thredgold Economic Associates, “the dreaded ‘headwinds’ of housing anxiety, soft commercial real estate valuations, uncomfortably high unemployment, and high angst about unprecedented $1 trillion annual budget deficits for as far as the eye can see, combine to limit growth opportunities. It is an ugly mix!” The fact is this Great Recession was extremely broad impacting every standard metropolitan statistical area in the country while only health care and educational services continued to add employment during most of the downturn. The big picture is further clouded by disagreement whether we are about to enter an inflationary period or a deflationary period.Clear fiscal policy (government spending) and monetary policy (interest rates and the printing or retracting of money) is based on a presumption that we are about to inflate or deflate. If we are not sure then the Fed will likely do nothing until they see clear signals, which may be too late if the inflation genie has escaped from the jar.Accentuate the positiveThose of us back here on Main Street can fret about the macro aspects, but we cannot influence them. We can act locally by sharpening our business plans, growing our businesses and hiring even one or two employees. If 1,000 of us do that, it will send a positive signal which can draw others off the sidelines. I was at the Concord Chamber’s Business Showcase last month. Attendance was strong and the crowd was upbeat — much more so than a year ago. The key is to keep a positive attitude and slog through this prolonged downturn. I sense there has been a winnowing out of the naysayers and disgruntled. After nearly 18 months of economic stress, nobody wants to listen to whining. Yes, it has been a tough time. No, it is not over. Yes, we have a way to go — perhaps well into next year before we see a strong measurable uptick. And yes, it will likely be three to five years before we get back the 55,000 jobs lost here in New Hampshire.

While the New Hampshire gazelle is not loping along at the brisk pace we have been used to, New Hampshire is still leading New England.

The crux of the matter in Concord, Boston, Augusta, Montpelier, and Washington, D.C., is we are spending much more than we collect. Like any business we need to develop real forecasts of revenues and trim expenses to fit within the forecasts. Maybe Washington will send more stimulus money — but what happens when that spigot is turned off? And it will be turned off.

A rising tide floats all boats as the saying goes, but if it takes three, five or eight years to get the economy back on track, how will we pay off the accrued debts and deficits? It’s enough to keep one up at night, if we weren’t so tired from meeting our own payrolls, covering health insurance costs, paying taxes and keeping the lights on.

Hang in there, we probably have hit bottom and things are improving — albeit slower than we would like.

Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Fellow of the Royal Institution of Chartered Surveyors (FRICS). He can be reached at