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Economic Survival
Keeping your head above water during a slow recovery

By David Black

“I do not think our unemployment rate will crack 8%,” I told the reporter from the Patriot News a year ago. “Our economy is balanced here, with education, medicine, advanced manufacturing, technology solutions, business services, and of course government—including state government, federal government and the various military installations. Balance will keep our unemployment rates low and help us weather this economic storm better than other regions.”

I was also asked about the new president and Congress and said, “It is clearly a new day in Washington with a dramatically new agenda. I think we will have to wait and see before weighing in on issues like card check, health care coverage, the environment and other issues to be championed by President Obama, Speaker Pelosi and Senator Reid.”

One year later, I was right on one count: the Harrisburg region (Cumberland, Dauphin and Perry Counties) is doing better than regions across the country. But unfortunately the unemployment rate has reached 8.4%.

It was a new day in Washington, and thankfully card check has been delayed, healthcare reform was passed and other crucial issues are being debated. Still, I had hoped the economy would have rebounded and that Washington would have discovered a more cooperative middle ground by now. In light of gridlock, the president and Democrats in Congress are rethinking their strategies. But in the meantime we should remember what we have been hearing from most economists since the onset of the economic nosedive: it will be a slow but steady recovery that could take until 2013 or 2014 to reach pre-2008 levels.

I think the painful realities expressed by terms like “jobless recovery” and “double dip recession” are part and parcel of a slow recovery. But recovery is still the word we need to focus on. Just what does a slow recovery mean to the average small business in the Harrisburg region? While I am not an economic guru (I did not stay at a Holiday Inn Express last night), I try to learn from those around me. Here is what I have discovered.

Most business leaders I talk with are feeling a little better about the general state of things. But while they have some optimistic thoughts about the local economy, they are still moving forward cautiously. Businesses that have staff openings are not rushing to fill those voids or to rehire furloughed staff. We are in the mindset of doing more with less for the foreseeable future. The same holds true with capital investments in equipment, technology upgrades and physical expansion. The question for business owners is, how long can they make do with fewer staff members? When will the demand for products or services become so great that they can no longer put off capital investment, technology upgrades and physical expansion?

At some point, all of us in business need to poke our heads out from under our recession blankets and start to think about the future of our operations. We need to be prepared for the post-recession regional economy even though we still hear phrases like double dip, because (at least for now) that threat appears to have passed. While we should not do crazy things that involve excessive borrowing and spending (not that borrowing is easy now) it continues to be important to be prepared for better economic times and future opportunities.

In the face of current high unemployment rates, further potential furloughs in state government in the years ahead, and continuing fears about the economic future, the answer is not to go crawling back under the covers, it is to seize the business opportunities at hand. Even if the worst happens in the form of double dip recession, we know that the economy is cyclical and will come back. Following the last recession of this magnitude in the early 1980’s, we had nearly twenty years of positive growth, with just a couple of short economic bumps.

Recently there was an article in the Patriot News about new jobs at Amazon’s local distribution hub. Amazon is consumer product based, and they are obviously anticipating a long-term up tick in business. That means they will likely be expanding their technology capacity using a local technology firm that just might need to add hardware and hire more software technicians.

OK, that has not happened yet. But small advances in optimism by large companies such as Amazon—along with the possibility of much-needed highway funding coming next year from Washington and Harrisburg—are rays of economic sunshine that could jumpstart both the commercial and residential construction industries. Although we are becoming more of a consumer spending-based economy (hence Amazon’s possible expansion), there is still the perpetual need to spend money on infrastructure. The outlay of big dollars on construction projects like the rebuilding of the Route 581/15 interchange, or the upcoming federal courthouse project at Sixth & Reily Streets in Harrisburg, should give the construction industry a much-needed shot in the arm, and give encouragement to all regional business owners.

We have some serious challenges, to be sure, primarily with policy and direction at the federal level. I am a proponent of meaningful healthcare reform, but I am still to be convinced that we received that from Congress and the president. The stimulus bill that was President Obama’s first piece of business after taking office fell far short of stimulating the economy. Most expected a big public works bill, one that would invest in serious highway construction and other public works like much-needed sewerage and water infrastructure. As the deficit grows with the implementation of healthcare reform, and if the economy does not pick up, there will undoubtedly be calls for more strategic government spending and possibly rethinking our public priorities. The midterm elections were partly an indicator of consumer confidence in the economic direction of the country.

Although we are all busy running our businesses on a daily basis, I strongly recommend that we take the time to communicate our concerns and frustrations to Washington and Harrisburg. The time for business as usual in government is over. We can no longer afford to kick the can down the road on critical problems and postpone solutions.

These are challenging times for businesses, and they require that we research solutions, have a good understanding of our businesses’ capacities and capabilities, and develop the ability to look beyond the next few months or year into the future—and into a stronger economy.

So with the end of the year approaching, I ask you, as a business owner or manager, where do you see your businesses one year,  two years or five years from now? While it is prudent to be concerned about the bottom line today, I suggest that we also need to take the long view. We do that by carefully weighing opportunities and risk, and then going full speed ahead with our individual business plans. That way each of us will be doing our part to help create a vibrant economic future for the entire tri-county region.

David E. Black is President and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corporation (CREDC). The organization has developed a reputation for quality events, member services, and legislative advocacy. It has initiated projects with over $100 million in economic impact, creating and retaining over 4,900 jobs in Cumberland, Dauphin and Perry Counties. He can be reached at (717) 213-5020 or at

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