Economist Sean Snaith doesn’t think the recession of 2007-2009 will leave the same psychic imprint on consumers today that the Great Depression had on its survivors.
“No, it won’t be a lifetime-altering experience,” said Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida College of Business Administration.
That doesn’t mean it won’t have an effect.
“This will be a 5 to 10-year period” of austerity and frugal spending, he said.
That also means businesses and consumers shouldn’t expect a significant improvement in jobs and construction for another few years.
Snaith was the keynote speaker for Commercial Real Estate Women Jacksonville Tuesday at Maggiano’s Little Italy in St. Johns Town Center.
More than 50 members heard Snaith, who regularly visits Jacksonville from the UCF campus in Orlando, present a forecast long on facts and short on immediate optimism.
Snaith said that the economy has been growing since the third quarter of 2009, following the recession that began in December 2007 and ended in June 2009.
“It was the worse recession since the Great Depression,” said Snaith, who said that consumers lost $12.2 trillion in wealth during the economic carnage as the value of real estate and investment accounts plunged.
In addition to using the term “carnage,” Snaith also referred to the “scar” of unemployment as one that reminds him of Frankenstein.
National unemployment remains near 10 percent while state and area unemployment has been 12 percent or higher.
When Snaith talks about recovery, he talks about various indicators recovering in 2011, 2012, 2013 and even 2015.
Snaith said as far as jobs, he sees an improvement in 2012-13 but doesn’t think payrolls will reach pre-recession levels until 2015, an eight-year stretch from the start of the recession.
Snaith said he doesn’t see a V-shaped recovery, in which the economy recovers as steeply as it plunged. Instead, he sees what he has been calling the “gravy-boat” recovery, a shallower and longer recovery before the economy grows strongly again.
He called the strong economic boost at the end of 2009 “a lump in the gravy boat.”
Snaith didn’t talk about political party predictions on Election Day, but he did talk about a U.S. forecast relative to what he called the “SkyMall policy.”
SkyMall is the airline and online catalog of gadgets that Snaith said he is convinced he really needs until he’s off the plane and heading for his luggage.
He said he was enticed with the gadget that allowed a griller to sear his or her initials into the steaks, and was piqued by the inflatable pillow that nestles onto the seatback trays, although he wonders what happens when the passenger in front leans back.
He said he actually bought a clothes steamer, but found himself with a still wrinkled but soggy suit. The appliance now sits in his garage, gathering dust.
“I have my suspicions there is a SkyMall catalog with economic policies floating around the Beltway” in Washington, D.C., he said.
He referred to several government programs, including the American Recovery and Reinvestment Act of 2009, health care reform and the Troubled Asset Relief Program, as “SkyMall policies.”
They look good, but did they or will they work as advertised?
And, he said, “neither party has the magic wand” when it came to Republicans and Democrats.
Snaith said the Florida economic recovery began in the first quarter of 2010, but that it will be slow because of the “floundering” labor market as well as a change in demographics.
Formerly a strong population growth state, Florida has not been attracting as many out-of-state retirees because they can’t sell their homes and they lost retirement wealth.
Similarly, the state also is not attracting as many job seekers because there aren’t many employment opportunities and the seekers might not be able to sell their homes to make the move anyway.
Snaith told the commercial real estate practitioners that he expects “a couple more difficult years.At the same time, he said, “Those that survived the recession came out stronger.”
Source: The Daily Record, Snaith: Expect years of economic austerity, by Karen Brune Mathis, managing editor, 11/03/2010, kmathis@baileypub.com