It’s been rough and rocky travelin’,
But I’m finally standing upright on the ground.
And after takin’ several readings,
I’m surprised to find my mind’s still fairly sound.
Willie Nelson, “Me and Paul”
Six months into 2010, what sort of readings are we getting on our economic condition?
We want to believe we’re fairly sound. Oh boy, do we want to believe. Maybe it’s a case of being down so long that any piece of good news looks like up to us, but we believe we see signs that substantiate that belief.
Boeing has twice announced production-rate increases for the 737s built in Renton. While it hasn’t said what the impact will be on regional employment, that has to be better than the alternative – doesn’t it?
The Western Washington chapter of the National Association of Purchasing Management’s monthly survey and index of current business conditions and expectations for the next 90 days have been well above 50 – indicating an expanding economy – for months now.
That business executives have a positive attitude about what’s going on also has to be good news – doesn’t it?
Companies are buying other companies. An Idaho food company bought Green Garden Foods, a Kent-based maker of salad dressings, sauces, dips, salsa and mayonnaise. Tacoma’s McFarland Cascade bought a pole plant in Oregon from Weyerhaeuser. A Tukwila glass manufacturer bought a local company that makes bath and shower enclosures.
That companies are willing to commit capital for acquisitions has to be a sign of improvement – doesn’t it?
Many of the conditions in January that seemed to bode well for a rebound – including low interest rates and pent-up deferred spending by business – are still in place.
So that means the economy should be even more primed for growth – doesn’t it?
Look – this recession stuff is getting old. What’s it been, two, three years, depending on what official or unofficial milepost you use to designate its beginning?
These things don’t go on forever – do they?
We wanna believe, we wanna believe, we wanna believe...
Yet we can’t quite convince ourselves that the recovery is real, broad, deep or sustainable.
We have not become so desperate for any sign of an economic spring that we tune out news to suggest winter hasn’t released its grip.
Banks, including some in Washington, are still failing; regulators continue to send letters to others warning them to raise capital, find a buyer or risk being added to the list. As long as the banking sector remains in turmoil, credit for businesses that hope to expand will remain tight.
The unemployment rate for Tacoma and Pierce County in April was 9.6 percent in May 2010, higher than both April 2010 and May 2009.
The Northwest Multiple Listings Service data for Pierce County show a 28 percent decline in pending sales in May vs. the same month a year ago, and a 1.8 percent drop in the median price of closed sales.
Government at all levels is facing still more cutting of hours and jobs as tax revenue, showing the ripple effects of the recession, continues to swoon.
Want more? Of course you don’t – but you know there’s plenty more.
As much as everyone would like to call an end to the recession, we just can’t convince ourselves that it’s here or near. As much as we’d like to give you a somewhat different outlook than we reported six months ago – if only to avoid recycling old material – the weight of the anecdotal and statistical evidence isn’t sufficient to favor that viewpoint.
But if patience-counseling phrases such as “the worst is over” no longer reassure, doesn’t that, in fact, constitute a more pessimistic forecast than six months ago? Indeed it might, if the best we can hope for is six more months of muddling along and bouncing on the bottom.
The longer this persists without any clear sign of improvement, we may be in search of more apt Willie Nelson lyrics with which to summarize our attitude. Perhaps something along the lines of:
Well I gotta have a drink, and I sure do dread it...
Bill Virgin’s column on business and economics appears Sunday in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.