The headlines tell the story: “Worst recession in 70 years,” “Unemployment hits new high,” “More companies close” or “State going broke.” None of us are sorry to bid farewell to this year or even this decade.
But, as we enter the next one, we worry about what lies ahead. Will banks still be slow to lend and consumers to buy? Will low growth and high unemployment become the norm? Will government spending continue — and will that spending help or hinder recovery?
Most in the region’s business community have many questions and few answers. Some are simply waiting for the economy to bounce back, thinking our companies will rebound as well. Some are trying one tactic then another, hoping something will stick. Still, others are attempting to ignore the severity of the problem, thinking we’re making progress when we really aren’t.
The future may seem murky, but its outline is emerging and it is a sobering picture. What experts see is not simply a recession, even a record-setting one. Instead, pundits and policy makers talk about “the new normal,” based on a major restructuring of the economic order.
Changes in markets, institutions and government policies will make the new decade different from the old one — and probably different from any that you or I have yet experienced.
In its latest report, the UCLA Anderson Forecast sketches a portrait of a new economy that abandons the past decade’s dependence on consumer spending, low savings and cheap imports. Instead, say UCLA researchers, Americans will save rather than spend, and economic growth will come from exports (both manufactured goods and agricultural products) fueled by a weak dollar.
Overall growth will be modest nationwide, perhaps 2 to 3 percent through at least 2011. Unfortunately, California is likely to lag behind the nation, hobbled by a number of factors including the depth of the real estate crash and the state’s large and growing budget deficit. Forecasters see no growth until mid-2011 and double-digit unemployment until 2012.
Granted, this is a sobering picture. But, it is not all gloom and doom and not the “lost decade” some pessimists predict. As our report in this issue points out, there are bright spots. For example, health care and private education are growing nicely. Economists also point to other modest signs of improvement: Home sales are picking up, and the declines in hospitality and retail are slowing.
Some in our region are already searching for positive ways to respond to an economy in flux, embracing change rather than bemoaning it. They are rethinking strategies, repositioning offerings and redeploying staff.
Businesses are not simply looking at their capabilities and forcing them to fit the new reality. Instead, they are asking what else cus- tomers need and want, then developing the capacity to deliver those products and services. In short, the lenses through which business leaders view the new normal are not rose-colored, but forward-looking.
It is their stories that we intend to uncover and share in the pages of Comstock’s throughout this coming year of transition, stories that can inspire creative thinking, boost confi dence and build success, one company at a time, throughout the region’s business community. We at Comstock’s have just celebrated our 20th anniversary; now we’re beginning to position ourselves for our 30th. Whatever changes lie ahead, we intend to be here, charting them for our readers.