Economists and politicians say the economy is recovering. But what are conditions and expectations like on the ground in Lexington?
I surveyed a variety of local business people to ask what they are seeing and thinking. Most said business was better last year than in the previous two years, and they are optimistic about 2012.
But many were concerned about the effect this year’s elections would have on the economy. Regardless of their political leanings, most worried that continued partisan gridlock would hurt growth.
Here are excerpts from their comments:
■ Larry Bell, general manager of the Hyatt Regency, expects his hotel to have a good 2012 despite a soft business travel market. He wishes Congress and the president would “agree on an approach for payroll taxes and government spending without as much drama as we’ve seen lately.”
■ Phil Osborne, chief executive of Preston-Osborne, said a diverse client base has helped business at his marketing communications and research company remain steady. He thinks election-year politics will hurt job creation.
“I’m one of the guys the president is pointing his finger at,” Osborne said. “We technically have three job openings right now that I’m not rushing to fill. My mind-set in the current climate is not to create new jobs, or even to fill existing vacancies, but to wait and see what the political posturing in Washington does to the small business environment.”
■ Rob Morris, owner of Lowell’s Independent Automotive, is seeing strong business growth for the first time in four years. He recently added two technicians, but he worries about keeping them busy. “While we’ve seen some improvement, many of our customers are still delaying basic maintenance on their cars because they can’t afford it,” he said.
Morris would like to see more government stimulus aimed at middle-class people to create business demand. “A lot of folks will say that we need to cut taxes and regulation in order to get the economy growing again. That’s a head-scratcher for me,” he said. “Lowering my taxes and putting a little extra money in my pocket won’t help me create a job. Neither would letting me pollute more.”
■ Rick Christman, CEO of Employment Solutions Inc., which specializes in job-skills training, said the bad economy has increased demand for his company’s services. Among his plans for 2012 is opening a cosmetology school in Winchester. But he, too, is worried about politics.
“The uncertainties surrounding the ability of the United States to reform its entitlement spending and control long-term debt is keeping vast amounts of potential investment capital on the sidelines,” Christman said.
■ Brian Raney, a principal at the high-tech incubator Awesome Inc., is optimistic about the local economy. Lexington’s low cost of living makes it attractive for entrepreneurs, but the lack of local capital and investment activity is a problem.
“It’s a great time to be innovative and start something new, build something people want,” Raney said. “Awesome Inc. plans to help launch and grow 20 companies in 2012.”
■ Phil Holoubek, president of Lexington’s Real Estate Co., is optimistic about the coming year: “In fact, this is the most optimistic I’ve been since the year 2000.” Holoubek said both office and residential rental property at his company has filled up in the past six months for the first time since 2008.
“Interestingly, (residential rental) is the variable that may restart demand for home purchases, as renting eventually becomes more expensive than owning,” Holoubek said. “The one part of our business that will take a bit more time to recover is the development side. There is still a lot of commercial real estate that is being purchased from the foreclosure market for 50 cents on the dollar.”
■ Deborah Long, owner of Dudley’s On Short, is cautiously optimistic about the economic recovery.
“My biggest concern is the media painting such a bleak picture,” she said. “We often are so afraid to spend money, but the economy will not move unless there are some dollars spent.”
■ Wyn Morris opened Morris Book Shop in 2008, just as the economy was tanking. Still, he said, business has been good, and a move from Southland to Chevy Chase last fall helped produce his strongest year yet in 2011.
“I have lived here all my life, and there’s as strong a sense of community as I’ve ever seen,” Morris said. “That’s good for local businesses like ours.”