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A dismal economy is casting a pall on the New Year in most of the United States, but the outlook doesn’t seem quite so grim locally.
Nationally, homeowners are defaulting on loans in record numbers; banks are failing; top corporations are folding, laying off workers or filing for bankruptcy.
Home foreclosures are happening in Carroll County, but Greg Goff, chief executive officer of First National Bank in Carrollton, says few are homes that were financed by local banks.
And the locally owned banks are faring well, Goff said in a recent interview. “We have growth, and loans are strong. Our assets and income are up, and we made more loans this year than last.”
Carroll County’s diverse industrial base may be helping to soften the economic blow being felt elsewhere, but local business and industry are not immune.
“We do see that there is a lack of overtime pay right now,” Goff said. “That can change a lifestyle.”
Christine Hunt, a reliability engineer with Dow Corning – Carrollton, said Dow’s product line is varied, consisting of silicon-based products used by many industries ranging from health care, personal-care products and textiles to automotive and construction.
The Carrollton plant has a “lean” staff, Hunt said, but added, “no changes affecting jobs are being planned at the Carrollton site at this time. ... [We] have been and continue to be [lean], to address changing conditions.”
The story is a bit different for Arkema, the chemical company formerly known as M&T Chemicals and Elf Atochem.
Plant manager Annis Banks said Arkema’s products are all tied to the automotive and housing industries, and the company is trying to control costs. “Business was off 30 percent of budget for November, and we are trying to mitigate spending,” Banks said.
Mary Jean Riley, vice president of finance and administration at North American Stainless, said production at the Ghent plant typically slows down this time of year, but admits sales have been affected due to the difficult economy.
“Customers are concerned about inventory levels and are waiting to order material until they absolutely have to have the material,” Riley said. But, company officials remain optimistic. “We still feel strongly about the fundamentals of the stainless market and have not slowed down on the $300 million expansion that we have had under way.”
Riley said there isn’t an official hiring “freeze” at the plant, “but we are being selective on which positions we are replacing if an employee leaves the company. Not all vacant positions are being filled immediately.”
Attempts to reach officials at ArvinMeritor for this story were unsuccessful.
If anything, temporary employees may be taking the hardest hit.
The temporary job market in Carrollton is somewhat flat, and a lot of clients with CBS Employment Service have been laying off, said Jamie McIntyre, manager of the Carrollton branch on Highland Avenue.
“Our clients are saying that it should pick up in January or February,” she said.
This is the slowest she’s seen the market since she started working in the temporary employment industry three years ago, McIntyre said. “Business is off about 50 percent, but we aren’t panicked yet. We are slow every year this time.”
Riley said NAS has cut back on temporary and contract employees, using permanent NAS employees to do the jobs that were once done by temps or contractors.
Farm prices that were at an all time high as recently as August are now dropping weekly, according to the U.S. Department of Agriculture.
Many factors involved in the price decline include weather conditions and demand, but the high cost of fuel was noted as one main reason for the decline in production and higher costs.
In July, crude oil reached record prices of just under $150 per barrel, according to www.oil-price.net; since August, those prices have plummeted as the U.S. economy sagged into a recession and demand has dropped. As of Dec. 29, oil had fallen back below $40 per barrel.
At the same time, gasoline prices dropped from a national average of more than $4 to under $1.70 by the end of 2008, according to the American Automobile Association.
But the good news is that interest rates also are dropping, Goff said. The prime lending rate – the rate banks pay to borrow money was set at 0.25 percent this week and could drop to zero percent, Goff said.
Money is available locally to those interested in buying a home, he said, adding that an individual with a good credit rating is in an excellent position to buy.
Realtor Sherry Bartley agrees. “People looking for a bargain are going to find one,” she said, adding that interest rates for home mortgages are at a 40-year low.
Cindy Dunn, a loan officer at United Citizens Bank in Carrollton, concurred. “People are buying cheaper homes for rental property,” she said. And while the bank has foreclosed on some homeowners in the county, “now is a good time to buy a house.”
Bartley said her agency has been selling mostly foreclosures to investors, but they have been showing higher-priced properties, too.
Still, many people are worried about their 401(k)s, their retirement savings programs often provided by their employers. Goff said people who are within 10 years of retirement are in the worst shape right now, because they may not have enough time to recoup losses caused by the the stock market slump.
“When people start feeling better, things will come back,” Goff said.