From Deseret News archives:
Economist predicts midyear turnaround
William Conerly, an economist and senior fellow with the nonprofit National Center for Policy Analysis in Washington, D.C., said the economy will "hit bottom in the late spring or early summer."
Conerly was the featured speaker at the Utah Commercial Real Estate Symposium at the Salt Palace Convention Center. He said in an interview that the good news about the economy "is on back order, but should be in by May or June."
Recovery of the national economy from the current recession is going to be muted, meaning that the growth rate of the economy will be below average compared to previous recessions, he said.
"So it may be the middle of 2010 before it really feels good, even though we're going to be on the upswing in the second half of '09," Conerly said.
Historically, most economic recoveries were marked by significant growth in the housing market, but due to the extremely high level of excess home inventory on the current market, that scenario would be rather unlikely, he said.
He added that other sectors of the economy are still struggling, such as capital spending by businesses, "so we're going to have a slower recovery than we normally have."
Conerly said Utah's strong population growth would also act as a catalyst to help the state's economic recovery.
"It makes the state a better environment for job creation," Conerly said. "Companies like to see a lot of population growth when they are moving in. It means that they are going to be able to find workers."
He downplayed what some analysts and politicians called the new "green economy," which some have touted as the next major driver for economic growth. "There are going to be jobs in environmental activity, but it is not going to be a new source of economic strength," he contended.
The eventual turnaround in the economy will occur when established companies decide to take advantage of the current low interest rates and lower commercial real estate pricing to begin expanding their businesses, he said.
His advice to companies? "Have an action plan for when sales get better and make sure that you've thought through your plans ahead of time," he said.
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