What is recession? It’s one of those words that’s thrown around a lot, but seems a bit vague, sort of like post-modern or neoliberal.
According to Brian Chezum, associate professor of economics and co-chair of the economics department at St. Lawrence University, a recession is defined by two consecutive quarters of negative growth in real Gross Domestic Product.
Under that definition, the nation is not in a recession, as the third quarter real GDP grew by 3.2% in 2022.
However, the country did technically experience recession last year, as the first two quarters of 2022’s real GDP declined. And the north country, according to experts, tends to lag behind the national average.
“If you look at historical data, typically you’ll find other parts of the country experiencing these sharp peaks and valleys, and we tend to have a bit of a lagging effect here in the north country,” David Zembiec, CEO of Jefferson County Economic Development, said.
That means if the nation is just recovering from a recession, chances are we’re still in one. And we are, according to Mr. Zembiec, experiencing some recession-like effects.
“There does seem to be a recession,” he said of the north country.
What does that mean, though?
“Typically, when you see a recession, you look at a lot of layoffs and job cuts,” he said. But that’s not necessarily what we’re seeing in the north country.
Instead, he said, “we’re still in a tight job market where there’s vacancies that business owners aren’t able to fulfill.”
“Talk to any industry,” he said. “Everybody’s having trouble finding enough help.”
That’s why, even if recession comes, or even if the north country is technically in a recession, he doesn’t expect significant layoffs or other common indicators of recession.
“Companies here are most likely going to hold on to the people they have rather than try to find new ones.”
Rather than layoffs, the north country might expect a few other occurrences, Mr. Zembiec said, such as early retirements, 401(k) dips, and various minor frustrations that are part of the normal ups-and-downs of a globalized economy.
Businesses, he said, are doing what they can to survive.
“A lot of businesses are struggling, but we’re also hearing from a lot of businesses that things are going okay, and even improving.”
It really depends on the kind of business, but most he said still share issues of employee recruitment and retention.
What they all might benefit from, he said, is recession-prevention protocols.
Things like managing costs, incorporating more efficiencies, and minimizing overhead, he said, can help stave off the worst effects if bad economic conditions endure.
Ben Dixon, executive director of the St. Lawrence County Chamber of Commerce, agrees that our situation seems like a recession, and has some advice for businesses.
“Regardless of whether we’re technically in one, we’re seeing some challenges that parallel a recession for a lot of business owners, particularly with things like inflation, supply chain issues, and labor shortages.”
Not all businesses are suffering equally.
“It seems to be industry by industry, with some types of businesses doing better than others here in the pandemic and post-pandemic eras.”
For instance, the hospitality industry, which was generally devastated during the pandemic, has bounced back now that people are eager to go out again.
Whatever looms on the horizon, though, businesses ought to be prepared.
“Managers of businesses should not wait to recession-proof their business,” Mr. Dixon advised.
“That work should ideally happen upon startup of the business, but if not then, now is the time to do it.”
He said north country businesses are fortunate to have a number of local organizations able to offer help.
“There’s a program called the St. Lawrence County Center for Entrepreneurial Leadership, and they teach business resiliency and recession-proofing,” Mr. Dixon said.
He also cited the Center for Pandemic Response at the Adirondack North Country Association, which helps businesses fortify themselves against potential disasters. Even though it was created in response to the pandemic in particular, Mr. Dixon said they can counsel businesses with regards to a number of different problems they might face.
The Small Business Development Center through SUNY Canton, he said, also offers business development counseling, and can do it with an eye towards recession-proofing.
“We have a great support ecosystem for entrepreneurs here in the north country, and I think business owners should take advantage of that,” he said.
Brenda Rexford, owner of Rex Hardware in Canton--a mom-and-pop general store--says business is steady, but fears a potential recession.
“We are very, very nervous of a recession,” she said.
“When you see the cost of goods up for fuel, heating oil, and groceries, those are all necessities that the customer needs, and I’m not understanding how they will have enough cash flow to do fix-up projects or buy other things they need in life, so I’m nervous going forward.”
They’ve already done a lot to brace for potential impact.
“We’ve minimized overhead as far as help goes, but we’re going to have to take a good look at our inventory and figure out what we’re moving forward with and what we’re not, and it’s gonna be a hard call, but we can’t sell everything anymore because of the cost of goods.”
She thinks the key to supporting business during an economic downturn is to keep shopping local.
“That’s the key to keeping businesses alive and well, is to shop local,” she said. “If you’re shopping online, that means you’re not supporting a local business, and it may be the breaking point for them.” In fact, she said that she thinks the snowstorm over Christmas, which kept people from traveling far, was pivotal to their bottom line during the holiday season, as it forced people to gift-shop locally.
“I just want to encourage people to shop and patronize local business,” she said. “Doing whatever you can to buy local is greatly appreciated in any business.”
Ben Dixon strongly agrees with that sentiment.
“In a recession, north country businesses more than ever should think about supporting each other, and turn their procurement towards locally owned business.”
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