Business owners talk shop about the economy

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There is a sizable difference in measuring the economy and feeling the economy in a time of recession.  

Ed Snively, a real estate broker in El Centro, California, says that business is way up from last year. "I think that we are seeing positive things in our area.  We are seeing, number one, buyers are back in the market.  They are taking advantage of great, low interest rates, good selection, low prices on homes, federal incentives, state incentives on taxes, builder incentives, and our resale owners are also offering incentives, and that is really driving our market.  Our sales are on-pace now for a record year."

Jack Bernstein, who owns a corporate catering business and retail sandwich shop owner in Miami, says that business is down.  "I think, like anything else, having good, basic business principles, you are always going to have ups and downs.  This economy, there is no question, has affected us.  My corporate clients are off — one of them is off 44%."

Bernstein’s sector is one that feels the effects of a recession later than others.  He says that former clients that would provide him with business once each week before are now doing so once each month.  Ed Snively’s world of real estate, conversely, is a leading indicator of economic recovery.

Lakshman Achuthan, managing director of Economic Cycle Research Institute (ECRI), a company that forecasts recessions and recoveries, says that these two examples show how businesses have adapted to the recession.

"In both cases, what I am hearing, anecdotally, is that they have adjusted the businesses … to the new, slower economy.  They are both having products that are attractive in this newer, slower economy."  

"In essence, in a very Darwinian way, as a business manager, you want to actually let people go, or lay them off, or slow down hiring before the recession.  And, right now, before the recovery, you want to start hiring, and that is what I suspect you will start to see," offers Achuthan, in closing.

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