The recession is over according to the National Bureau of Economic Research, so we can all celebrate, right?
Yet, just a few weeks ago there was talk of a possible “double-dip” recession in which the economy would spike with a short burst of growth then fall back into recession. (That happened in the early 1980s.) But according to the Paris-based Organization for Economic Co-operation and Development, the U.S. will avoid a double-dip recession. There will be a slow, jobless recovery, but a recovery nonetheless.
Abbe Will, research associate at the Joint Center for Housing Studies of Harvard University, agrees that while there was “some weakness over the summer ... we might see 5% growth over 2009 in homeowner spending on remodeling.”
With continued high unemployment in remodeling and construction, consumers unwilling to part with their money, and meager housing starts, it’s no wonder that remodelers — as well as other small-business owners — are wary.
“It seems to me that we’re fooling ourselves by referring to this situation as anything less than a depression, and from what I understand, those usually have about a 10-year cycle,” says Ben White, vice president at Benvenuti and Stein, in Evanston, Ill. “We’re about halfway through it. If you haven’t designed your business to survive in this set of circumstances then you’re a bigger risk taker than I am.”
Despite the pall, an August Citibank survey of small-business owners showed that while 85% were worried about a double-dip recession, 75% were prepared for another downturn. The survey also showed a 4% increase from April to August in those reporting that business conditions were fair, while those who saw conditions as poor declined from 40% to 34%.
An even brighter note: in answer to the question, “If you knew what you know today about the challenges and opportunities facing small businesses in this country, would you do it all over again, or not?” Seventy five percent of survey respondents answered “yes.”
Long live small business.
—Stacey Freed, senior editor, REMODELING.