Monday, September 19, 2005

Hurricane's impact on local economy remains to be seen

Article Launched: 09/18/2005 08:02:12 AM

Economic outlook
Hurricane's impact on local economy remains to be seen

By Reporter Staff

News of the devastation left in the wake of Hurricane Katrina may have some economists worried, but locally, its full impact on the region remains to be seen.

Employers in Solano and Napa counties expect to hire at a strong pace during the fourth quarter of 2005, according to a nationwide employment survey released earlier this week.

The Manpower Employment Outlook Survey, which was released Tuesday, showed that from October to December, 23 percent of the companies interviewed said they plan to hire more employees, while none expected to reduce their payrolls. Another 44 percent expected to maintain their current staff levels and 33 percent were not certain of their hiring plans.

Still, the full impact of Hurricane Katrina on the economy has yet to be felt and Manpower officials noted they collected their data prior to the hurricane hitting the Gulf Coast region.

"It is too early to tell (the impact) because they still need to get things together down there in terms of what they will rebuild and when," said Greg Gardner, spokesman for Manpower's Fairfield office. "So I think for the fourt quarter (employment) numbers we won't see an impact but the first quarter (2006) numbers are in flux."

Data prior to the disaster showed that employers in Solano and Napa counties were expecting "slightly more favorable hiring conditions" for the fourth quarter than in the third quarter when 27 percent of the companies interviewed intended to add staff, and 7 percent planned to reduce headcount, said Gardner. "Employers express hiring plans that are identical to those reported a year ago when 23 percent of companies surveyed thought employment increases were likely and none intended to cut back," he said.

For the coming quarter, job prospects appear best in durable and non-durable goods manufacturing, wholesale/retail trade and services, while employers in education, transportation/public utilities and public administration are unsure of their hiring intentions. Hiring in other sectors is expected to remain unchanged.

Michael Ammann, director of the Solano Economic Development Corp., said he doesn't expect the local region to take much of an economic hit at all from the hurricane.

"I don't see a lot of overall impact other than those individuals or companies who have customer relationships with someone there," Ammann said, noting that most manufactures in this area ship regionally or to countries overseas.

Communities around the hurricane zone will, of course, feel significant impact, Ammann said, noting that firms whose facilities were hit by the storm will likely look to relocate somewhere nearby in order to keep their employment base.

Katrina's economic toll continues to mount in the Gulf Coast region with rising energy prices, snarled shipping traffic, lost jobs and wrecked businesses.

Estimates are as high as 400,000 for the number of individuals who have lost jobs there.

Commerce Secretary Carlos Gutierrez this week urged business leaders to invest in the Gulf Coast region, saying the private sector must play a role in rebuilding the hurricane-devastated area.

"I hope businesses will consider investing and locating enterprises in the rebuilding zone," he said.

And the Labor Department this week set up a new Web site to help people who have lost jobs due to Katrina find new work.

The site - katrinajobs - is designed to help people lookign for new full-time employment either in their home state or in the state where they have relocated and to also provide informaiton on part-time employment in the hurricane cleanup and rebuilding efforts.

The Associated Press contributed to this report.

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