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Economists say economic recovery is on the horizon

Editor's note: This is the last in a series of stories about how the recession has affected the lives of Northern Shenandoah Valley residents.

Thomas Boroujerdi
Thomas Boroujerdi, of Winchester, works on his resume at the Virginia Employment Commission office in Winchester, while other jobless men and women sit behind him in the waiting room on Thursday. Rich Cooley/Daily

Thomas Boroujerdi works on resume
Thomas Boroujerdi, of Winchester, works on his resume at the Virginia Employment Commission office in Winchester, while Wade Williams, reemployment specialist for the VEC, walks around to assist clients. At center is Joshua Mobley of Winchester and Dave Johnson, right, of Strasburg. Rich Cooley/Daily

By James Heffernan -- jheffernan@nvdaily.com

WINCHESTER -- The pundits may say the recession is easing and a recovery is on the horizon, but try telling that to the dozens of jobless residents who line up daily for assistance at the local Virginia Employment Commission office.

For them, the scars from the economic downturn are fresh and deep.

In May, Thomas Boroujerdi, 52, lost his job as a retail service manager with Floors & More Design Center in Winchester, where he was responsible for sales, inventory and marketing of rugs.

A native Iranian who fled the country during the Islamic revolution in 1979 and later became a U.S. citizen, Boroujerdi has more than 30 years of experience in business, including as an entrepreneur. During the 1990s, he ran an international trading company in Auburn, Ala., that specialized in imported Persian rugs and antiques. He also has served as a flight supervisor for an Iranian airline and general manager of a day spa in Atlanta.

"I'm trying hard to find a job," he says, preferably something in retail management.

Samantha Greenfield, a re-employment specialist with the VEC, is helping Boroujerdi update his resume, which is impressive but lacks polish. He welcomes her suggestions, mostly minor revisions that will make him stand out as a job candidate.

"We try to help them along," says Greenfield, a Strasburg resident who was laid off herself in November as special events coordinator for the Marriott Ranch in Hume. "A lot of the people we see are older folks who don't have the computer skills."

Boroujerdi, a handsome man with olive skin and wisps of gray hair behind dark-rimmed reading glasses, speaks glowingly about his family, especially his two children, one of whom graduated from George Washington University this week and plans to become an anesthesiologist.

But he admits that losing his job has made life difficult for him and his wife, who works as a cosmetologist.

"We are getting by," Boroujerdi says, with a little help from friends, church and the VEC.

The couple plan to enroll at Lord Fairfax Community College in the fall toward second careers as teachers -- he in math, and she in physical education.

Boroujerdi says he isn't afraid of having to start over in his 50s.

"Looking around, I take comfort in seeing other people like me here, and I think they can look at me and take comfort, too."

Dave Thomas lost his job with a lawn and garden contractor about a week ago when the company decided to shut down. The 56-year-old Strasburg resident has 30 years of experience in production and supervision.

Thomas has kept himself busy during the interim with household projects, but the bills haven't stopped.

"I needed to come here to get some unemployment benefits started until they can help find me a job," he says.

***

The top of Virginia's jobless rate stood at 8.5 percent in June, more than double that of the same month last year and far worse than the region's five-year average of 3.3 percent.

For the first six months of 2009, Winchester-area unemployment averaged 8.4 percent, a level not seen since the 1990-91 recession. By most accounts, that downturn was short-lived, lasting only eight months. But unemployment is a trailing economic indicator, and the local jobless rate remained high well into 1992.

"There was lot of growth in Winchester-Frederick County in the 1980s and early 1990s, but overall the labor force was significantly smaller then and less diverse," said Gene Schultz, manager of the local VEC office.

Expanding the picture to include Clarke, Shenandoah and Warren counties, the region had 27,000 fewer adult workers in June 1991 than it does today, according to VEC data.

By 1993, Winchester-area unemployment had receded to 5.4 percent, aided by the new Fort Collier Industrial Park in Frederick County that drew major employers such as Kraft Foods, New World Pasta and Green Bay Packaging. Valley Health also was incorporated that year, with Winchester Medical Center relocating to a campus setting off Amherst Street and partnering with Warren Memorial Hospital.

The top of Virginia added nearly 3,000 positions between 1992 and 1994, according to Schultz.

Other large employers would follow later in the decade. Warren County would welcome four distribution companies -- Family Dollar Services, Ferguson Enterprises, Toray Plastics and Baugh NE Cooperative -- creating 1,100 jobs and investments of $240 million.

***

So when can we expect a recovery this time around?

"People need to be realistic," Schultz said. "It's not going to happen overnight."

Last fall, unemployment in the region was running in the 4 percent range, he said. Within a span of three months, it had doubled.

"It's going to take a while for us to get back to 5 percent," which economists consider a healthy jobless rate, Schultz said.

Just in the past few months, International Automotive Components shipped 110 jobs from Strasburg to Mexico; cabinetmaker American Woodmark closed its Berryville plant, putting 250 people out of work; and General Electric announced it plans to turn out the lights at its Winchester Lamp Plant next summer, adding another 200 to the unemployment rolls.

There are some encouraging signs, however.

The Richmond research firm Chmura Economics & Analytics is forecasting a 15 percent jump in building permits in the Winchester area next year, second only to Harrisonburg. The trend would be a boon for local construction, which has been hit hard by the recession, as well as manufacturers tied to the housing industry.

The pace of job cuts in Winchester is expected to slow in 2010, with total employment down only 1.1 percent, according to Chmura.

But local retail sales, another important economic indicator, will remain sluggish, the group said, down 8.6 percent.

"One thing to keep in mind is that when people do start spending again, it might not be at the level it once was," Schultz said.

***

Traditionally, the Northern Shenandoah Valley has been a quarter or two behind the national recovery. Many are predicting that the U.S. economy will begin to pick up later this year.

Patrick Barker, executive director of the Winchester-Frederick County Economic Development Commission, said the top of Virginia's economy is poised for recovery, having evolved over the years into a good mix of manufacturing, distribution, retail, services, government jobs and health care.

"Diversity is key," Barker said. "I think that's why we've been able to handle this downturn, for the most part, pretty well compared to other areas of the state."

"We're not like Martinsville, where you have one or two major industries and unemployment is annually in double digits," Schultz added.

Locally, manufacturing is still a key component, Schultz said, though its base has eroded over the past five to 10 years.

"The companies that have survived tend to be leaner. They're turning out more product with fewer people," he said.

Barker points to M&H Plastics, Southeastern Container and HP Hood as examples of "tomorrow's manufacturing."

Much of the outside interest in the local economy is still coming from manufacturing and distribution companies, which covet the northern valley's location along the Interstate 81 corridor and proximity to the Virginia Inland Port.

The Home Depot opened a rapid-deployment retail distribution center in Winchester last year, and Solaris Paper Inc. is building a 400,000-square-foot manufacturing and warehousing operation in the North Shenandoah Industrial Park near Strasburg for its line of virgin-fiber paper products, including bath tissue, paper towels and napkins.

The Front Royal-Warren County Economic Development Authority has received a handful of inquiries in the past month from manufacturing and distribution companies looking to either expand or relocate, according to Executive Director Jennifer McDonald.

The EDA also has set a goal of adding between 750 and 1,000 new living-wage jobs over the next five years, with a focus on attracting manufacturing and technology companies, which McDonald said will help the Front Royal-Warren County community increase its industrial tax base.

In the meantime, the EDA also is focused on retention, McDonald said.

"Part of any successful economic development plan is retaining the employment base you have," she said.

McDonald said consumer spending and a loosening of the credit markets will be key factors in the local recovery.

"That's when companies, of all sizes, will be a little more comfortable spending money themselves."

Documents

arrowPDF: Winchester MSA data



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