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Signs suggest we are emerging from recession

The stock market is back in positive territory for the year with the Dow surging above 9,000. Many banks and credit card companies are making plenty of money again. And the cover story of Newsweek declared the longest recession since the Great Depression is (most likely) over.

Friday came more encouraging news: The economy shrank a less-than-expected one percent from April through June, triggering more proclamations we're gradually shifting from recession to recovery.

Forgive us in shell-shocked Florida if we're keeping our party hats in stow. Layoffs are continuing and auto dealers like Ernie Haire Ford are still going out of business (see story below). Given the depth of Florida's housing market crash and a rising double-digit unemployment above the national average of 9.5 percent, many economists contend we'll trail much of the country's economic recovery by months.

Yet, set aside those lagging indicators like rising jobless numbers and welfare rolls, which tend to improve after employers are convinced the economy is solidly back. There are several stimulating signs, even in the bay area, that the economy is starting to turn upward.

Temp agencies

For Jeremy Dixon, general manager of Brandon-based temporary staffing agency A1 Temps, March/April marked the bottom. "I doubt we could have survived as a company if it had continued at that level," he said.

Fortunately, Dixon said, demand for temps has risen 15 to 20 percent in the past couple of months.

Some clients seeking workers today are in the hard-hit construction industry: a grout and mortar company, a truss manufacturer, a building supplies company. Demand is also rising for nursing and skilled IT professionals. As an example, Dixon said he could probably place an experienced Oracle developer in a matter of hours.

A1 still is able to place only a fraction of the thousands of jobless that come calling. But employers at least have a better attitude, Dixon said.

"It used to be when we called on clients, they said, 'Not only am I not hiring, but here's my resume.' That was pretty scary," he said. "That seems to have changed."

Title closings

One of the strongest gauges of financial activity in the housing market is the sale of title insurance, a barometer for both housing sales and refinancings.

Mike Conway, who oversees title closings in 27 states as executive vice president of First American Title Insurance, has definitely witnessed an upswing.

In Florida, First American had 5,300 title closings in the second quarter ended June 30, an 18 percent increase from 4,500 in the first quarter. Closings dropped slightly between June and July, about 3 percent, which Conway attributes to fewer refinancings as interest rates rose.

Conway compares the situation to a Navy diver who has hit the bottom of the ocean and has begun climbing a very gradual incline toward dry land. "We've effectively hit bottom," he said, "but it's going to take a while to get to the beach."

Finance

Nicholas Financial Inc., a Clearwater company that finances auto loans, is on a roll. In posting a 45 percent increase in profits this week, Nicholas said it's moving forward with expanding its network, and it's looking for acquisitions.

After adding locations in Akron, Ohio, and Gastonia, N.C., Nicholas will have 50 branches in 12 states.

Peter Vosotas, Nicholas' chairman and CEO, said the company remains cautions but is "encouraged that the economy is showing some signs of stability, and we feel comfortable proceeding with our planned expansion."

He credits the improved results to lower operating expenses, the cheaper cost of borrowing and fewer problems with bad loans.

Housing starts

Between April and June, the Tampa Bay area had 915 housing starts, according to real estate tracker Metrostudy. That's still far off the pace of 1,312 starts in the same quarter of 2008. But it's a solid uptick from the all-time low of 708 starts in the first quarter of this year.

Consider it more evidence, some housing analysts say, that we're past the worst of the housing downturn.

Signs suggest we are emerging from recession 07/31/09 [Last modified: Friday, July 31, 2009 9:28pm]
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