Businesses see slight improvement in Southland economy, but don’t expect it to come roaring back soon
You’ve crafted dozens of cover letters, neurotically fine-tuned the resume.If you’re unemployed, or underemployed, an undercurrent of hope has run through the months, even year, you’ve job hunted. One day, companies will hire again, you say.
The good news? It’s clear the Southland’s economy hit rock bottom and is on a slow road back to health.
Labriola Baking Company employee Juan Lopez pulls ciabatta bread off a conveyor belt at the companys bakery in Alsip. The company’s president, Rich Labriola, said he hasn’t seen many signs the economy is improving.
(Joseph P. Meier/SouthtownStar)
But the bad news is employers still are too vulnerable to begin spending the money on hiring new employees when they’re not sure they have enough of a demand to sustain a larger work force, and they’re wary of potential dips in the economy.
And no one is in the mood to go through more layoffs that plagued much of the last two years.
For now, they’re paying their slim staffs overtime or using temporary employment services to fill spikes in business.
“Things are still very flat,” said Thomas Hall, past chair of the Southland Chamber of Commerce and senior vice president and director of commercial banking with Mokena-based First National Bank. “It takes a while before (employers) are confident enough to add to their payroll on a permanent basis. That typically means seeing a full year of improvement before adding.”
The economy hasn’t rebounded to the point where businesses are forecasting a successful 2010. Still looming is the sluggish housing market, despite government incentives and low prices.
But the silver lining could be that to the degree the economy fell, there’s no where for business to go but up.
It just may take a while.
Hall cited broad weaknesses still in manufacturing and distribution arenas – many of the jobs Southlanders relied on – but said signs point toward growth as prices of steel have grown, indicating demand is up.
“We don’t anticipate seeing any real move to increase headcount till later in the year,” he said.
Most Southland employers echoed his prediction: 2010 would see slow progression, but next year is poised to be the rebound year.
“We’re still feeling it, feeling some of the pain,” said David Wexler, owner of The Little Guys Home Electronics in Glenwood. “But people are walking through the door buying stuff and before, they weren’t even walking through the door.”
What Wexler has seen is a pickup in people upgrading their current home entertainment systems, as opposed to outfitting new houses. That side of his business has increased 20 to 25 percent compared with two years ago.
Before hiring, though, employers say they need to see several back-to-back quarters of improvement on their books.
“We feel we’re right-sized now,” said Mary Fote, the vice president of administration for University Park-based Bimba Manufacturing, which manufactures cylinders that allow other companies to automate their production.
The company employs 390 people, down about 19 percent since January 2009. Bimba used a combination of layoffs and not filling openings caused by retirements, Fote said.
“No company wants to face another reduction in force in the near future,” she said. “Things might not pick up as much as we thought.”
Business remains stalled for Ace Hardware’s paint division in Matteson. It saw a poor fourth quarter at the close of 2009 and sales have not improved so far this year, Jack Wickham, the division’s director, said.
“When people buy a new home the first thing they always do is paint some rooms, and that’s good for us,” he said. “I just think it has to do with we dropped so far in the housing market, an increase now doesn’t really equate to a big spike in volume.”
Wickham expects it will take three to four years before the business builds back to levels it operated at in 2006 and 2007.
Ace’s only bright spot has been in exterior paints, which haven’t necessarily grown in sales but also haven’t dropped.
“People are more interested in protecting their home (from the elements) rather than beautifying,” Wickham said.
Restaurants, in particular medium- to high-end ones, still haven’t seen much improvement, said Rich Labriola, president of the Labriola Baking Company. It supplies wholesale bread and pastries to restaurants from Indianapolis to Milwaukee.
“I think there’s a difference between things being a little better and what everyone’s talking about – turning the corner,” he said.
For restaurants, the price of commodities has made as much, if not more, of an impact on business that just a drop in diners, Labriola said.
When prices rose during the recession, restaurants ate those costs, unable to pass them along to patrons. As a result, Labriola has seen a drop in sales to posh restaurants.
“Costs have come down to be more manageable,” he said. “Not really that (restaurant) sales have taken off, costs have gone down.”
Labriola has had more patrons at its cafe in Oakbrook Terrace, where prices, hovering around $10 per dish, are more palatable to budget-conscious diners.
“The higher the check average, really, the more it’s a struggle to keep getting people through the doors,” Labriola said.
Some fields, such as retail and health care, have continued growing during the Great Recession, contrasting what most other industries have seen.
It’s why the experts tell the jobless all the old cliches: think outside the box, look to different or emerging fields, such as the green movement.
An upcoming job fair at Moraine Valley Community College’s Job Resource Center has many of the same employers it sees every year – 30 at last count – signed up in search of new workers.
Center Director Pamela Payne would not name them but said they are offering salaried, part-time, hourly, and opportunities with benefits and without.
“If you’re looking in manufacturing, there might not be (jobs),” she said. “Sometimes you can’t always align the job with the industry. If you’re an accountant, have you ever considered higher education or doing accounting in health care?”
JOBLESS ON THE RISE
Local jobless rates, not seasonally adjusted, for Southland communities as tracked by Illinois Department of Employment Security.
DECEMBER 2009 2008 2007
Chicago Heights 18.3 13.4 9.4
Evergreen Park 11.7 7.7 5.0
Homer Glen 8.9 5.3 3.8
Oak Forest 10.7 6.6 4.5
Oak Lawn 10.9 7.1 4.7
Orland Park 8.4 5.4 3.8
Park Forest 11.5 7.7 5.7
Tinley Park 8.9 5.7 3.7
Chicago metro area 4.9 6.9 10.6
MIXED OUTLOOK
Chicago-area businesses say the worst of the Great Recession is over, but they’re not yet ready to begin hiring, according to a survey by the Management Association of Illinois.
62
Percent of employers who expect staffing levels to remain unchanged this year.
17
Percent that expect to hire more employees.
12
Percent that will cut their work force through layoffs or attrition.
46
Percent of businesses that think the economy is getting better.
61
Percent that expect their company’s performance to be better this year than in 2009.
Read the original article from SouthTown Star.
Distributed via Chicago Press Release Services