Recession’s effect on state mild
The recession was a lot different this time around for North Star Printing Co. owner Steve Reynolds.
During the 1990-1991 recession, Reynolds had only been in business a year and it was a tough time. He struggled to make payroll, and the slump took most of his capital reserves
Last year when the economy again slumped into recession, Reynolds’ business did not take the same dip, though it did slow in the months following the Sept. 11 attacks on the World Trade Center and Washington, D.C. The Loma Rica Drive printing business has seen steady growth since its start in 1989, and now employs seven.
Reynolds’ print shop – a cyclical business in tune with the ups and downs of the economy – was never as dead last year as it was in 1990. There were just some days with only one or two jobs.
Now the printing business is picking up, and Reynolds is back to “cranking out the work.”
“I’m not in touch with too many places, but if this is the extent of the recession, I’m pretty pleased,” he said.
Reynolds took bold steps during last year’s downturn, steps that will expand his business this year, he said.
In November, he acquired the printing accounts and two presses from Buttonworks, a Sacramento business. He also bought a two-color, 20-by-28-inch press in June.
While 2001 revenues of $600,000 were flat, Reynolds expects them to jump 30 percent this year, thanks to the Buttonworks acquisition and the new printer.
A report released last week suggests the recession may have been a relatively mild one in California – if you weren’t one of the people laid off last year by businesses, primarily in high-tech fields or in the Bay Area. And it may be over soon.
The Federal Reserve Bank of San Francisco said in a report released March 4 that the current recession is turning out to be the opposite of the 1990-1991 downturn for California businesses.
Back then, the downturn “sowed the seeds of a long and difficult contraction” for California, while other states’ economies grew.
This time, California seems to be taking only a modest hit, while employment is contracting in other states – the first time in 20 years.
The report predicted that in California, the recession will likely turn out to be mild and of short duration.
The positive forecasts continued Thursday, when Federal Reserve Chairman Alan Greenspan told a Senate committee, “An economic expansion is already well under way, although an array of influences unique to this business cycle seem likely to moderate its speed.”
Closer to home, Citizens Bank of Nevada County continued its growth in loans and deposits last year. The bank’s loans were up 25 percent last year, despite the recession.
“We grew at 25 percent, which is really outstanding growth,” said Tim Peterson, the bank’s chief credit officer. “We haven’t seen much of a downturn anywhere.”
The bank did not see the typical signs of a recession, such as an increase in write-off loans or slowdowns in loan repayments.
Bank officials noted the numbers could show the bank’s success in competing with other area banks, rather than a strong local economy.
But Jack Crombie, the bank’s president and chief executive officer, said he gets a similar bright picture from other Northern California bank executives. Crombie said the recession’s effects on his bank have been minimal, though people have been more cautious.
“I have a sense that companies, individuals, are just being more cautious about how they’re spending money,” Crombie said.
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