Seeking Shelter From an Economic Storm

By George Berkheimer, STAFF WRITER



The latest season of economic turmoil has taken a toll on big business and high finance. Now, it seems, the problems have begun trickling down to Main Street. The local assessment is that the region's growth engine continues to turn, but will likely run rough for the foreseeable future. Timing and tuning will need some adjustment in the meantime, but the danger of stalling is remote.

"To some extent, we've been sheltered in Howard County," said Laurie Reuben, co-chair of the Howard County Chamber of Commerce's (HCCC) Small Business Council.

As president and CEO of Cheshire Consulting Group of Skaggsville, a company that provides organization development consulting, Reuben has had ample opportunity to observe the economic fallout occurring around the country.

"As I travel around, I see many more signs of the failing economy in the cities and towns I visit as compared [to the local area]," she said, although there are some reflections of the recession to be found here.

"For me, one of the biggest signs was the closing of Trapeze restaurant" in Maple Lawn, Reuben said.

In general, business in Howard County appears to be in a holding pattern "rather than holding on by a thread," she noted. "Owners are deciding to wait and see how things fall out over the next few months before ... moving forward with anything."



Mitigating Factors

One of the best reasons Howard County's business community is doing so well, comparatively speaking, is its proximity to the federal government. "We've been economically insulated somewhat by the amount of federal spending that occurs here" through defense and other contracts, said Dick Story, CEO of the Howard County Economic Development Authority (HCEDA).

It should mean that the region would be slower going into and faster coming out of a normal recession. The catch, of course, is that this is not a normal recession.

"This one is different because consumer confidence is lower than it has ever been during a recession," Story noted. "Normally, people try to cure their angst by shopping, but that hasn't been the case this time. Dealers are having a hard time moving cars and consumer goods because the pension system has gone down the drain on Wall Street."

Another observation is that the greatest amount of growth in Howard County's job market is coming from companies that are here already, not from companies moving to the area.

"Overall, though, companies are being cautious if they can make do with the amount of space they have," Story added. "But home builders, roofers, HVAC contractors and electricians are laying off ... and restaurants are taking a big hit."

Another unfortunate result, Reuben noted, is that nonprofits that depend on the local business community for support may have to tighten their belts as well.



Chamber Response

As part of its mission to improve the business climate, the Chamber holds a small business conference each spring. In light of the current economy, though, the executive committee felt something more was needed this year.

"We recognize that we're here to serve small business, and we didn't want to wait until the first quarter of 2009 to give our members something of value," said Small Business Council Co-Chair Mark Slatin. "We'd rather see our members go into the first quarter with some tools in their belt to help them deal with the problems they're facing."

For that reason, the Chamber will be sponsoring the second in a series of Small Business Dialogue Breakfasts on Dec. 16 and has invited Craig Englehaupt of Commercial First Bank, Steve Wolf of Berman Goldman & Ribakow and Dr. Richard Silver of the Thrive Center to speak at the event.

"They will each present 10 tips to help companies get through an uncertain economy," explained Anne Darr, director of Workforce Development and Business Recognition for the Chamber. "The topics will run along the lines of what should you tighten up, what should you not cut out and tips to deal with banks. There's some anxiety out there for both owners and employees who recognize that credit has tightened up and is affecting business ... and we're trying to be proactive and give some [advice] on how to get through it."



More Clouds on the Horizon?

There are two big questions running through the mind of the business community at the moment: How long will the recession last, and will it have any effect on the Base Realignment and Closure (BRAC) process?

"Most experts agree that recessions generally last anywhere from three to five quarters," Story said. "As for the BRAC, the first quarter of 2011 is when the biggest piece of its bell-shaped curve moves through the market. Hopefully any recession will be long over by then."

Indications are that it will be a difficult period to wait through.

"Velocity is down," Story noted. "There are still some really big deals to be had in the marketplace, but the number of lookers is declining."

Clearly, he said, business owners are taking a wait-and-see attitude, and the Maryland Retailers Association has also predicted zero growth for the upcoming holiday season for the first time in decades.

"People are still spending, but they're looking for good values," Story continued.

That said, "There's not a lot of optimism that things will get better in the short term," he added. "There's some silver linings out there, but I'm looking at a lot of clouds."

From the perspective of the Chamber, "We're hoping that people will use the resources available to them," Slatin said. "There's a lot to be said for getting together with peers to talk about what's going on and sharing coping strategies."