By BETSY COHEN of the Missoulian | Posted: Sunday, September 6, 2009 1:20 am
JoAnn Kershner no longer harbors the worry she did this time last year - when the words "unprecedented" and "national recession" seemed perpetually linked.
These days, the Bitterroot Valley retiree is far more optimistic and believes the country's economic woes are becoming a thing of the past, she said while taking advantage of the Labor Day weekend sales at Southgate Mall.
Perhaps, she said, it's a reflection of how she chooses to understand the news.
"Instead of saying we have 10 percent unemployment," Kershner said, "I like to say we have 90 percent employment.
"That's how I like to look at things these days."
Nevertheless, her concerns a year ago prompted conservative spending practices in her household, which have now become a habit that won't change any time soon.
"I'm saving more, I'm do more trading of things, and my husband and I will continue cutting back so that we have more money for a rainy day or for something special," she said.
Although Kershner was randomly picked from the crowd of Missoula mall shoppers to answer questions about the economy, her sentiments echoed what regional economist Larry Swanson sees in the data he sifts through daily to understand how western Montana is faring.
The cautious but optimistic tenor is also shared by Kent Bray, director of regional operations for CTA, who has felt that shift all across the Rocky Mountain West - where his Montana-based architectural and engineering company is getting busy again with contracts.
It's felt too by Tim Winger, manager of Southgate Mall, who has tallied an increase in mall traffic - up 4 percent - from this time last year.
"The economy is no longer in free-fall, it's bounced backed a bit and now it's kind of in a pause," said Swanson, director of the O'Connor Center for the Rocky Mountain West at the University of Montana. "The stock market at the national level had a big run up over the last couple of months and now it's kind of retrenching - a condition, I think, we will see going into the fall and early next year.
"In some ways, it characterizes the mood and the way people are looking at it. People in general aren't sure if there is any momentum to grow positively or what is the possibility of falling back."
A year ago, Swanson predicted Montana - in particular, western Montana - would be steadily chugging forward, wounded perhaps but relatively unscathed by the economic slowdown.
Last week, he said the economy has taken that course, offering just a few surprises.
Yes, the construction and building sectors took a significant hit - bigger than he would have predicted - but the state economy as a whole withstood the crisis: Home values held, and unemployment percentages and home foreclosures were among the lowest in the nation.
Among the few surprises is the fact that unemployment has not dropped more significantly.
"I was expecting that our unemployment percentages would continue to go down gradually in August and September, somewhere around 5.5 percent, typifying a gradual recovery and return to lower unemployment," Swanson said.
"Our unemployment usually peaks in February, and what went on was in January it was 6.6. percent and 6.9 percent in February, and when we got to March it was 6.6 percent," he said. "In June it was 6.0 percent and 5.8 percent in July.
"And that tells me we are sort of in a funk - that what is going on is a sideways recovery."
The data also tells Swanson that uneasiness lingers in Montana and the Rocky Mountain region. Businesses and individuals are on edge, waiting for more proof of recovery before taking any big moves or chances.
Such realities have forced Swanson to recalibrate the recovery timeline, pushing it forward to spring 2010.
"When we do come out of this," he said, "we will emerge with a different economy because so much of our growth over the past five to six years has been tied to real estate.
"That will remain an important segment of our economy, but it will be much slower or at a smaller scale."
Kent Bray shares Swanson's vision. On the ground, that scenario is already at play for CTA.
Although the economic recession forced the company to reduce its workforce by about 6 percent last winter - when work was at a relative standstill - CTA's 350 employees are once again busy at its offices in Texas, Wyoming, Idaho and Colorado.
"I've been in this business for 34 years and been through much more pronounced recessions," Bray said. "I think we have seen the sharpest part of the decline happen."
"We are seeing more activity for building, but it's not a huge bounce," he said. "There's a lot of pent-up interest to do projects, and some people have pulled the trigger to begin those and many are still waiting. For what? I'm not sure if it's financing or if people are waiting to see what happens with some of the larger issues. We don't know what the total impact of our health insurance reform will be or what inflation will be, and I think some people are waiting to see how all of that plays out."
Bray and his colleagues suspect this recession will, in the end, look much like the Japanese recession in the late 1980s and the economy will take on the look of an "L," experiencing a long flat period before it climbs.
"Although we are seeing a local uptick," he said, "we think the economy is going to be flat to the end of the year and through a good portion of 2010."
From a consumer standpoint, Swanson expects buyers will continue to be much more reserved in how they spend money.
The more reserved spending style, he said, may also be a new element to the emerging post-recession economy.
In the building sector, that trend is holding true.
"We are noticing our clients are taking a more conservative approach with their projects," Bray said. "We have many markets that we serve - everything from health care facilities to banks to schools to universities - and the home/resort high-end market, which we thought would be completely gone, is where we are getting more calls than we ever imagined, but the projects are much smaller."
At Southgate Mall, the economic climate has shifted spending in a notable way, said Tim Winger.
Parents are spending money on their children, buying them clothes, shoes and electronics, but the adults are not indulging themselves.
"Moms and dads are cutting back - that pretty much sums up what we are seeing - but the kids aren't," Winger said. "The luxury items and the higher-end stuff tends to be slow, and the middle and value items tend to be doing much better."
Despite the shift, the mall has had more customers than ever. As the months fly by and 2009 winds down, Winger said he's ever-encouraged by the steadily growing shopper numbers.
To him, it means business.
Like Kershner, Winger said there is optimism, albeit cautious optimism, in the air.
"I do think there always is this time of year, and especially going into the final two months of the year," he said.
"I think we will have a solid Christmas - a better one than last year."
Reach reporter Betsy Cohen at (406) 523-5253 or by e-mail at bcohen@missoulian.com.