<img src="http://www.joplinglobeonline.com/images/zope/extra.gif" border=0>Joplin’s economy emerging from recession<font color="#ff0000"> w/ economic recovery information</font>

By Wally Kennedy

wkennedy@joplinglobe.com

Anne Sharp test drove eight motorcycles until she found just the right one.

“I kept telling them they didn’t have the right rumble,’’ she said. “But this one has that Harley-Davidson rumble.’’

Sharp, a member of the Joplin Board of Education, picked up her new 883 Sportster last week at Joplin’s Cycle Connection.

“I want to use it to build a connection to the kids,’’ she said. “I’ll drive it to board meetings, but only in the summer time. I’m a fair-weather rider.’’

Sharp’s purchase of a motorcycle is indicative of a surprising trend at Cycle Connection that tends to confirm what economic analysts are saying about Joplin: It’s pulled out of the recession and is now in the recovery stage.

Cycle Connection, unlike Harley-Davidson dealerships elsewhere, has had a 29.5 percent increase in sales in 2009, which is 50 percent above the current national average for the Harley-Davidson Motor Co.

“While the environment has been challenging for us here in the Four States, we are grateful for the support of local motorcycle enthusiasts for keeping this sport the true epitome of an American dream,’’ said Nancy Hutson, a co-owner of Cycle Connection.

Of 670 Harley-Davidson dealerships in the country, Cycle Connection is in the top 20.

According to the latest “Adversity Index’’ by Moody’s Economy.com, Joplin is one of 79 metro areas in the nation that has moved from recession into recovery, which indicates the Joplin economy has actually grown in the past six months. The index is tracking the economies of 384 metro areas.

The index uses data on employment, industrial production, housing starts and home prices to identify metro areas that are expanding, at risk of recession, in recession or recovering. The index suggests Missouri is doing better than some of its neighbors.

Six of nine metro area in Missouri are in recovery. That compares to three of eight metro areas in Arkansas, two of six in Kansas and zero of four in Oklahoma. The areas in Missouri not in recovery are at Cape Girardeau, Columbia and Jefferson City. No metro area in the country is in expansion, the most positive category.

The states in recovery, according to the index, form a band of states running from the Gulf Coast to the Great Plains. It includes some mountain states. The index shows that the recovery is being held back by a lack of consumer spending.

Rob O’Brian, president of the Joplin Area Chamber of Commerce, said, “I think it does reflect what we have been hearing, which is that 2009 has certainly not been the best of years, and yet there are some glimmers of recovery out there. We have some employers who are hiring, and manufacturers who have made investments for new contracts in 2010.’’

The recession in Joplin appears to have lasted one year.

“If you track what Moody’s has been saying about Missouri, we were in a recession in early 2008 and that Joplin hit that level in August of 2008. That’s when we started to really feel it. From that standpoint, it’s been a full 12 months for us,’’ O’Brian said.

“This report that Joplin has emerged from the recession into recovery is hopeful information for us. Maybe the corner has been turned, but it’s only one month. If you’ve lost a job and are still looking for a job, it’s still a recession. It’s clear it’s going to take some time to rebound with job growth,’’ he said.

“What also is encouraging is that the state itself is in recovery. Most of the metro areas are in a recovery mode. Being in that 20 percent that are in recovery nationwide is certainly a good sign, but only time will tell,’’ he said.

O’Brian said Joplin has emerged from the recession more quickly than other areas because it did not sink as deep into unemployment as the country overall. He also said that housing prices in Joplin have held relatively steady when compared to the dramatic losses experienced in other parts of the country.

James Weddle, a managing partner with Edward Jones, the St. Louis investment firm that is the fifth largest in the nation in terms of financial advisers, spoke to about 420 local clients of Edward Jones last Thursday at the Joplin Holiday Inn.

Weddle said, “We are bruised, but not broken. We think the recession is over. It’s going to take a few more months for the government to acknowledge that, but our research indicates that has happened.’’

Weddle said the stock market is an early indicator of when a turnaround occurs. He said, “The market literally turned on a dime on March 9 and has increased 50 percent in the last seven months. In addition, the rate of job losses is declining. It will slow down before it bottoms out.

“A trailing indicator is employment,’’ he said. “We expect that to improve in the first and second quarters next year. Business owners will be conservative about rehiring. It will take a while to convince them that the recovery is under way.’’

Weddle said companies have trimmed unnecessary costs to become “mean and lean.’’ That is reflected in recent reports about corporate earnings, which shows how corporations have shed jobs to increase their bottom line.

Weddle said there are 10 Edward Jones financial advisers in Joplin and 12 in the surrounding area. The advisers who work in Joplin represent 5,921 households with assets of $955 million, he said.

Weddle told those attending the client appreciation event that the Federal Reserve and the U.S. Treasury responded appropriately when the real estate market collapsed and the credit crisis unfolded at this time a year ago. Had they not responded in the way that they did, the situation today would be much worse than it is and that it is likely a recovery would not be under way at this time, he said.

Weddle said it is likely there will be another significant downturn in the economy.

“There’s a possibility the market, in the short term, will drop again by a few hundred points,’’ he said.

As noted by O’Brian, Joplin’s real estate market, though far from stellar, is a bright spot when compared to other metro areas. The metro areas in recovery have tended to avoid the boom-bust housing cycle.

Foreclosure rates in Joplin increased for the month of August over the same period last year, but the rate is much lower than the national average, according to First American CoreLogic, a leading collector of data on home prices, foreclosures, delinquency activity, real estate sales volume and mortgage-loan activity.

The rate of foreclosures among outstanding mortgage loans in Joplin was 1.25 percent for the month of August, an increase of 0.56 percentage points when compared to August 2008 when the rate was 0.69 percent, according to First American CoreLogic. But foreclosure activity in Joplin is lower than the national foreclosure rate, which was 2.86 percent for August 2009.

The price of a house in Joplin has remained relatively stable, according to the Federal Housing Finance Agency. Of 296 metro areas in the nation, Joplin ranked at No. 60 60 for a period that ended on June 30. The price increase in Joplin housing for that period was 0.19 percent. That compares to a 26 percent decrease in housing prices in Las Vegas, Nevada, for example.

David Mitchell, director of the Bureau of Economic Research at Missouri State University in Springfield, said the recovery for Southwest Missouri will take time and that employment will take years to return to 2008 levels.

Mitchell said the bureau predicted Southwest Missouri would start to see a recovery in the third quarter of 2009.

“That confirms what we have predicted based on our study of previous recessions. There’s only so far down the economy will go. Southwest Missouri has a fairly good industry mix. That helps to protect us. It takes longer for us to feel the recession, they aren’t as severe here and the recovery is a little faster,’’ he said.

“If employment were to start improving now, it would be the middle of 2014 to get back to where it was. Since it is not starting now and there will be more decline, we are predicting that it will be 2016 before employment gets back to where it was,’’ he said.

“The recovery from the last recession during the presidency of George H.W. Bush was described as a jobless recovery. This recovery in terms of jobs will make the George Bush recovery look fantastic,’’ he said.

By the numbers: National home sales uptick

Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires. Sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August, the National Association of Realtors said Friday.

Source: Associated Press

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