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Elkhart Hopeful But Still Unsure About Economy

Posted By RVBusiness On April 3, 2012 @ 7:54 am In Breaking News | No Comments

Editor’s Note: The following is an excerpt from a Sunday feature in Indiana’s Elkhart Truth offering a snapshot of the area’s economy as it recovers from the devastating unemployment and impact on its manufacturing base during the “Great Recession.” To view the entire article click here.

No one seems ready to exhale.

Most everyone can point to signs of an economic rebound around Elkhart County, with new jobs, business expansions and brightening attitudes about the future, but many are still holding their breath. While they see the community improving, they worry about a number of events and possibilities that could reverse the recovery.

Alex Strati, president for the northern region at Old National Bank, explained the hesitancy that consumers and businesses owners are feeling. The headwinds created by the presidential election and climbing fuel prices are giving people pause but, at the same time, the steady, upward performance of the stock market is giving them confidence about their investments.

Indeed, the bank has budgeted for growth this year, although that growth is anticipated to be modest.

“I really do think we are on the right track,” Strati said. “It’s much better than it was.”

Other professionals in the area hold similar opinions. They, too, believe things are better but challenges remain.

Pain at the Pump

With gas prices surpassing $4 a gallon and three suppliers hiking the price of their products as a result, Bill Dawson, vice president and general manager at Clean Seals Inc. in South Bend, is fearful another recession could bloom.

“If oil prices keep going up, it will derail what we have done,” he said.

He has met with his employees and prepared them for the possibility that if the economy sinks, everyone will take a pay cut. The smaller paychecks and fewer hours that were the norm during the recession could return if fuel prices drag down the recovery.

What happens at the pump ripples through the entire economy, Dawson noted. Consumers will be putting more money into their gas tanks and have less to spend on clothes, extra food and leisure activities like eating out.

Looking at his Elkhart County-based customers, Dawson believes fuel costs will eventually whack the recreational vehicle industry. Not only will gas crimp how much money consumers have for making a discretionary purchase of a motorhome or travel trailer, it will force manufacturers to pay more for every component that goes into a unit.

“I’m not trying to paint doom and gloom,” he said. “I think the economy is headed up but it’s very fragile.”

Even if the gas crisis eases and the economy continues to strengthen, Dawson doubts Elkhart County will boom like it once did. Still, he admires the work ethic and willingness to change to meet the demands.

“I don’t know of any place that has people like Elkhart County,” he said.

Looking for Workers

The people he sees walking along Middlebury Street in the afternoon draw special admiration from Scott Welch, president and CEO of Elkhart-based Welch Packaging Group Inc. In fact, he said he wants to hug them because they are making the effort to get and keep a job.

Surprisingly in the city with 12.1 percent unemployment, Welch said he is having trouble finding good candidates to fill the 10 to 15 positions he has open locally. Many of the people who submit applications, he said, have work histories that indicate they collect a paycheck until they qualify for unemployment. Then they quit.

“We’re trying to find people who want to work for the next 10 to 20 years and we’re not finding a very big pool,” Welch said.

The problem was common when unemployment was 4 to 5 percent and, after being dormant for the past couple of years, has cropped up again. It has reached such a point that recently Welch called company officials into a brainstorming session to figure out ways to attract people.

Over time, the difficulty finding workers could mean projects will get shifted from the Elkhart plant to Welch Packaging’s other operations across the Midwest. Plants in Cleveland, Chicago and Toledo, for example, Welch said, do not share Elkhart’s unique problem of finding people to employ.

“We have the work if we have the people,” he said.

To view the entire article click here.

 

 

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