The announcement last week that Caterpillar would be closing its Jefferson plant was an economic blow to Jackson County. It is the second large manufacturing industry to close in the past few months — the LP plant in Center shut down in the fall. And other local industries have cut back production and employees to varying degrees.
So despite the uptick this week in the Stock Market, these troubled economic times are not over. There will probably be more pain ahead before the economy begins some fundamental signs of real recovery.
When will that happen? Nobody knows, but here are some items to watch for in the coming months:
--Spring housing sales could be a barometer of the state of the housing market. Foreclosures are still high, but appear to have leveled off, perhaps because banks are waiting to see the impact of federal bailout funds. Many of the current real estate sales appear to be distressed turns where investors are grabbing property on the cheap, betting on a long-term return. That may churn some property, but it’s not a true sign that average buyers are reentering the market. Jackson County is overbuilt and it could take months to work through the existing home sales. As soon as the market turns, the pent-up sales — houses taken off the market today due to the low prices and slow sales — will flood back in and could keep housing prices depressed here for several years.
--There could be more shakeouts in the financial sector as several small banks with branches in Jackson County could fail this year. At the peak of the building boom, banks flooded into the county; one has to wonder if there is room for all to survive. Several area financial institutions appear to be “zombie” banks, institutions crippled by bad loans, but not yet taken over by the FDIC — the walking dead.
--Commercial and industrial defaults in Jackson County are of concern as the boom in businesses may have oversaturated the retail and industrial market. Some small stores may have difficulty surviving through the summer. Some large industries and warehouses along I-85 may fall victim to slower sales across a larger area. There’s a lot of industrial and commercial inventory unused and unfinished in Jackson County.
--Local governments are holding on, but are not strong financially. Some are eating into cash reserves hoping for a turnaround in the fall or early next year. Others have very little in reserves and are cutting expenses. All of this makes one wonder if Jackson County has too many governments with duplicated services?
--The unemployment rate is likely to climb in Jackson County in the coming months. It is usually a lagging indicator and will only start moving back down several months after a recovery is underway. Look for it to top 10 percent by summer.
These are just a few of the economic signs that merit watching as Jackson County attempts to adjust to tough times. Even with all the federal money being thrown into the system, the problems are so deep and so broad that there will not be any quick fixes.
What can be done about it?
03/26/09 at 08:24 PM
Mr. Buffington, are you aware that the city of Pendergrass is renovating the City Hall/Library? If you were, were you aware that the person contracted to do the work is Mr. Russell's brother who was in need of a job? So, his brother was able to secure him a job using his connections at the expense of the taxpayers in an econimic downtime... People in our community are out of a job or a house and the City of Pendergrass is throwing money down the drain! Insane.