03 February 2010

Economic Recovery: Not exactly as illustrated

By definition, anyone connected to “economic development” in any provincial government or quasi-government organization must be so positive and upbeat as to make a Pollyanna look like someone about to climb into a warm bath and open a major artery or six.

That pretty much sums up the view in central Newfoundland where the regions major private sector employer is gone and there is nothing on the go even remotely as big:
"(If it was contrary to what businesses are reporting) you would see it in job losses, you would see it in lack of inventory," [Amy Coady-Davis, chair of the Grand Falls-Windsor town economic development committee] said.
"The turnover is there - it is right in front of your face. You can't fudge those numbers. Sales are up, they have said they're up, you can see that they are up."
Well, not exactly, at least if you judge by some numbers included the same Telegram article and which came from no less an authority than the town’s own economic development agency:
According to the economic development office in Grand Falls-Windsor, housing starts are down 50 per cent from 2008 - there were 118 units built then as compared to 53 units in 2009.
There you have it.

And if that wasn’t enough, consider the view from the local chamber of commerce:
Gerald Thompson, president of the Chamber of Commerce - which represents 209 businesses in Grand Falls-Windsor - tends to agree with the town's positive outlook.
He said they are getting far more positive feedback from members than negative.
"... Although there's been a number of small businesses that have closed in the last year, we still know that the people that have done business here in this valley, their percentages over last year are up.”
Of course, they are up. 

Some of the people who used to patronize those businesses that have closed up have moved their custom to the ones remaining.

And those companies that went out of business? 

Well, they aren’t members of the chamber of commerce any more – most likely – so their voices wouldn’t heard when the chamber does a survey of members.

Just to add to the whole surreal atmosphere of the article, don’t forget that the president of the chamber of commerce cited as proof of the great things the positive view from the people who build new homes.

Oh yeah.

Things are so great in that business people are building only half as many homes as they did in that artificial bubble the year after the mill closed.  That would be the year of severance cheques and all that extra, short-term cash.

What happens from this point onward will be entirely the result of whatever economic activity there is left now that the Abitibi mill’s corpse has stopped twitching.  Those who are tempted to look at places like Stephenville need to think again.  All those paper mill workers found other jobs, mostly in Alberta.  Those sorts of options don’t exist for the crew from Grand Falls-Windsor.

Nor is there a chance that the province’s remaining paper mill – there were three in 2003, incidentally – will take up any slack.  It is struggling to survive.  The company that runs the mill is reportedly looking for a 10% wage roll back from workers.

The professional pollyannas can be as bright-eyed and optimistic as the want.

The reality may well prove to be not exactly as illustrated.