Bank exec: 2010 should go from 'less bad' to 'better'

Photos: Economic Forecast Luncheon

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Staff photo by Pat Auckerman Alfred "Skip" Shepard, the chief investment officer at First Financial Capital Advisors, delivers a presentation Wednesday Nov. 18, on the financial future during the Chamber of Commerce Economic Forecast Luncheon in Middletown.

Economic forecast not all bad news for next year.

By Jessica Heffner, Staff Writer Updated 7:32 AM Thursday, November 19, 2009

MIDDLETOWN — In terms of the economy, one analyst said it’s a matter of going from “less bad” to “better.”

That was the theme of the Economic Forecast Luncheon discussion headed by Alfred “Skip” Shepard, senior vice president and chief investment officer of Hamilton-based First Financial Bank. The event on Wednesday, Nov. 18, at the Middletown Senior Center was sponsored by the Chamber of Commerce serving Middletown, Monroe and Trenton.

Although struggling through sour housing, financial and employment markets this year, things are starting to improve, Shepherd said. That’s in part to government stimulus programs, which bounced the overall economic performance, known as Gross Domestic Product or GDP, about 7 percentage points higher than it would have been. Without the boost, Shepard said 2009 could have been the worst GDP year in history.

Federal spending will still be working down the pipeline in 2010, Shepard said, but will begin retracting, which is needed to take America’s economic crutch away “and let the economy stand on its own.”

The No. 1 indicator of that will be consumer spending, which has increased slightly even when excluding government-influenced home and car purchases. As more consumers save and pay down debt, the key also will be encouraging people to spend money. As a result, the recovery may not come as swiftly, Shepard said.

Overall, Shepard said he expects business equipment spending and residential real estate to increase in 2010, but areas like commercial real estate to remain down as inventories are still too high. For those harder-hit areas as well as unemployment levels, it could be 2011 before there is improvement.

“It’s been horrible, but the last few months haven’t been that bad and we think next year it will start getting better,” he said.

James Foster, economic development director for Trenton, said he felt the presentation would help manage the city’s investments.

“I think a great deal of the information was pertinent to my job, which is to encourage investment in the city of Trenton and encourage investment in our region,” Foster said.

Duane Gordon, executive director of the Middletown Community Foundation, said he was glad to hear some positive predictions. The foundation has been hit hard by decreasing endowment fund values while more residents are in need of services. “As soon as we can see the economy grow and out resources increase and some of the needs decrease, that would be very beneficial to us,” he said.

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Ya Fat Bill you guys need big fancy lunches when the rest of the world is going hungry, ever hear of the Russian Revolution? Ring a bell there brother?

Lead by example

Joe Tellup
11:20 PM, 11/26/2009

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Hey Genious Joe, us fancy business people have to eat lunch too, ya know. Do you want us to have a meeting and brownbag a PB&J sandwich?

Bill
8:00 PM, 11/19/2009

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Why is it that every time these guys have these things they are always eating, haven't they heard, 50% of the children in the U.S. are going hungry. If you comfortable in eating these expensive luncheons and dinners while a prat of your society goes hungry, at least don't rub it in the public's face, beside that, this is a banker, are we supposed to believe anything they tell us?

Joe Tellup
3:00 PM, 11/19/2009

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Until the employment picture improves, there will be no significant and sustained increases in consumer spending. Therefore, any "recovery" will be spotty and likely temporary. The chasm between the "haves" and the "have-nots" is only going to continue to increase. The wealth disparity in this country is resulting in an ever shrinking middle class. And I'm afraid that is something that is not going to change. Despite Shepard's guardedly optimistic outlook, great suffering lies ahead for many.

Mike
10:51 AM, 11/19/2009

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I might buy the whole GDP thing if any of it was contributed to by private sector investments and/or consumer spending. That 7% was all government.

PWC032096
10:00 AM, 11/19/2009

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