No sugar-coating the truth at downtown Montgomery hotel

Local Business Owners Hear Ugly Truth About Economy
Local Business Owners Hear Ugly Truth About Economy

MONTGOMERY, AL (WSFA) - At the Renaissance Hotel and Spa, there is no massaging the truth, the ugly truth about the economy nationwide.

"The unemployment is 6 and a half percent and we expect it'll go 8 and a half percent. No way to sugar coat that pill," said Nariman Behravesh, Chief Economist for Global Insight.

"Keep in mind there will be 3 million foreclosures this year," said Rich Sharga of Realty Trac.

Ellen McNair of the Montgomery Chamber of Commerce adds the experts were 'honest' about the state of the economy.

Brutally honest in fact, a painful dose of reality at the business forum yet business executives and business owners wouldn't have it any other way. That's because this is the kind of stuff they need to hear so they can make good decisions next year.

Kenny Coleman of Alabama Power does not anticipate layoffs but no doubt will be watching expenses more closely.

"We'll be watching our costs as they relate to fuel and personnel," said Coleman.

There is a touch of irony. The business forum is being held in the same place, the Renaissance Hotel that laid off nearly 60 employees a few weeks ago, all because of the struggling economy.

Despite the current slate of gloomy news, there is hope, a room-full of cautious optimism that the start to a recovery is about 6 months away, but that may be delayed now that Treasury Secretary Henry Paulson has changed his mind on using nearly one-trillion dollars in buying some of those troubled loans. Still, Alabama has managed to steer clear of most of the housing crisis due to its conservative mindset, but that's not the say the pain isn't trickling in.

"Lending has dried up and financing is hard to get," said Sharga.

"I would say in reality we should see some growth in two years," said Behravesh.

It's been said by many that 'this crisis is the worst since the Great Depression,' Behravesh says that's only partly true.  During the Great Depression, for example, 10,000 banks closed compared to 19 so far in this current crisis.

Whether the recovery begins in 6 months or two years, the sooner the better for people like Kenny Coleman.

"I always see my glass as half-full," said Coleman.

But for today at least, it was the same old story; the Dow fell more than 400 points on more bad economic news, the third straight day of losses for investors.