Gradual improvement in Upper Peninsula economy seen in 2009

ESCANABA - A local economics professor and Michigan Works! official are optimistic the economic outlook for 2009 will be better than the last few months of 2008. They believe, however, improvement will be gradual.

Jim Ciminskie, Bay College economics instructor, said while things may look up in 2009, it won't be "real bright and rosy."

Based on trends, Ciminskie said the recession could lift by mid-2009. According to experts, the U.S. has been experiencing a recession for more than a year and typically a recession ends after 18 months.

However, Ciminskie is a firm believer that human emotion plays a big part in the economy, especially in the stock market, where so much depends on consumer confidence and positive versus negative thinking.

"It's the self-fulfilling prophecy," he said. "If lots of people think the economy is going to get bad, they're not going to invest in the market and it will slow."

While there have been predictions of a stock market boost as early as mid-2009, Ciminskie said the credit crunch has slowed the lending process, and even people with good credit are having trouble getting loans. Investors and lenders are afraid to invest and lend because of a few problem companies. Ciminskie likened it to being in a room with 100 people, where one person has a disease that is deadly contagious.

"Who are you going to talk to? You'll avoid everyone," he said. "It's the same with businesses and companies. If I know 99 out of 100 borrowers are good but I'm afraid to hit that bad one, I'll stop lending to everyone."

Ciminskie said if the fear starts to loosen, loans will become more available and will bring those markets back up.

"It all comes back to confidence, confidence in the consumer," he said. "Until the positive attitude comes back... Historically that should be happening within next six months."

Robert Eslinger, executive director of business services for Michigan Works! the Job Force Board, said it's difficult to forecast employment in 2009. "There's been quite a bit of (shock and surprise) with how quickly the economic situation changed," said Eslinger of the sudden economic drop. "At this point we're not as severely impacted as other areas in the state and elsewhere, but there has been a slowdown. There really isn't a way to predict it until we get more into the new year."

Eslinger said with the exception of a few local companies that have specifically announced time periods for layoffs, there hasn't been much news of new job openings from big local companies in 2009

"People will continue to hire as they need to replace employees, so it's not all bad news," he said. "There are re-hires that will take place. It's just those new positions that may be put on hold more because of the current economic situation. We're optimistic that things are going to turn around, but it's really dependent upon a lot more factors than our local economy and our larger businesses."

Ciminskie said he thinks it will take awhile for many jobs to crop up and big industries to bounce back.

"This is a tough area because we don't have a lot of big industries," he said. "Places like EMP and the paper mill have been laying off and closing down for periods of time... It's going to take a while for that to pick up again because they're tied to the economy. For instance, the logging industry is closely tied to the housing industry, and that's down."

EMP gave some of its employees time off for a brief period over the holidays and NewPage has shut down some equipment for maintenance and repair.

Eslinger said the state and national economies do affect our local companies.

"When you look at larger companies in the six-county area and who they sell to, when people aren't buying it's difficult to continue to sell your products," he said.

Ciminskie said the silver lining could be the new administration, which may make people feel more optimistic about the state of the economy and help improve the situation.