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Economy tops headlines in 2009

One does not have to look further than Gail Pittman and Toyota to see why in 2009, the economy was the number one business issue.

In the April 28 edition of the MBJ (“Gail Pittman focusing growth on design and licensing”), Pittman was touting the uniqueness and flexibility of her company, Gail Pittman Inc. In October (MBJ, Oct. 27, “Pittman sets the record straight; jobs aren’t going overseas”), Pittman was lamenting the closure of her Ridgeland plant.

“They handled it better than I did,” Pittman said about giving her employees the bad news.

Early in the year, the news was equally bright about Toyota. Construction was humming along, and the business community anxiously waited for the plant’s opening. The first hint of trouble was reported in May (MBJ, May 19, “Toyota tweaks timeline for plant’s opening”), when the automaker delayed by several months the opening of its plant that is expected to employ 2,000 workers.

In November (MBJ Online, Nov. 14, “Toyota delaying building Prius plant?”), the MBJ reported Japanese sources that said the plant’s opening was to be moved, and again in December (MBJ Online, Dec. 8, “Report: Toyota will delay opening in Blue Springs”), citing the Detroit News.

Finally, it became official (MBJ Online, Dec. 15, “Newspaper: Toyota plant delayed indefinitely”).

Sen. Roger Wicker (R-Miss.) said, “This is an unfortunate reminder that Mississippi is not immune to the global economic slowdown.”

When the year started, many were reluctant to even mention recession (MBJ, Jan. 28, “That troubling ‘R’ word), though some could not ignore the signs.

One was Stacey Wall, president and CEO of Pinnacle Trust in Ridgeland. In that Jan. 28 article, he gave several converging factors that he believed marked the beginning of a recession.

“There is a good chance that happened in December (2007),” Wall said.

The National Bureau of Economic Research ultimately agreed with Wall and made it official in December (MBJ Online, Dec. 2, “NBER: U.S. economy in recession”).

While the economy and the housing market woes were big news when the year started, the price of necessities, particularly gasoline, seemed to dominate the public’s mind.

By the summer, it reached the $4-per-gallon level, and Mississippi businesses of all types started feeling the consequences (MBJ, July 21, “Peak oil now? If so, oil prices not likely to decline — ever”).

Ironically, as fuel prices fell into the fall, the declining economy and the troubled housing market rocketed to the top of concerns as large financial firms and institutions went under (MBJ, Sept. 22, “Judgment day comes for easy, cheap credit”).

Suddenly, the nation’s financial institutions faced a shortage of capital, and the federal government eventually committed to a $700-billion bailout package.

Multiple MBJ articles in November and December reported the banks that did not accept U.S. Treasury Department assistance and those that did. Some wondered when or if the bailout would work.

“We didn’t get in this overnight, and we aren’t going to get out of this overnight,” said John Allison, Mississippi banking commissioner (MBJ, Nov. 3, “We aren’t going to get out of this overnight,’ commissioner says”).

High costs and a faltering economy played havoc on consumer confidence, driving downward all year. As a sign of the times, Harold’s, an 18-store clothing chain, opened in the Renaissance at Colony Parkway in April (MBJ Online, April 22, “Renaissance adds more retailers”), and closed in November (MBJ Online, Nov. 11, “Harold’s shutting down”).

By the end of the summer, retailers were worried (MBJ, Aug. 11, “Back to school budget blues?”), and continued into the holiday shopping season, despite a better-than-expected Black Friday Weekend. (MBJ, Dec. 8, “Black Friday was great. What about the rest of the season?”).

The effects of the national and global economy on all Mississippi business and industry were telling. Phosphates Holdings Inc. reported a record second quarter (MBJ Online, Aug. 27, “PHI reports record quarter”), a 310 percent increase in sales for the third quarter, but was very concerned about preliminary fourth-quarter numbers (MBJ Online, Nov. 17, “PHI prepares for tougher quarter”).

During the fourth quarter, Sanderson Farms Inc. set a new annual sales record, $1.724 billion, and posted a loss of $43.1 million (MBJ Online, Dec. 4, “Sanderson sees record sales, still posts loss”).

In a personally painful incident, Gareth Roberts, CEO of Denbury Resources Inc., was forced to release a statement after “involuntarily” selling 15 percent of his company shares when a margin call was made on a real-estate related loan (MBJ Online, Oct. 31, “Denbury CEO involuntarily sells shares”).

“I’m disappointed to be forced into a sale of this many shares out of my Denbury holdings, but these are extraordinary times,” said the head of the largest independent oil and gas company operating in Mississippi.

The receding economy started making its effects felt on local economies by October (MBJ, Oct. 6, “Sales tax collections holding up well around the Magnolia State”). While Jackson, Hattiesburg, Meridian, Ridgeland and Tupelo reported an increase in sales tax collections, Gulfport, Biloxi, Flowood and Southaven were down compared to the year prior.

The full effects, however, were apparent in the employment arena. During the last week of November, Mississippi had the fourth-highest increase in displaced workers in the nation (MBJ Online, Dec. 11, “Unemployment claims spike”). The Mississippi Department of Employment Security was forced to add to its resources to meet the demand from the unemployed (MBJ Online, Dec. 3, “MDES beefs up Call Center”), and credit counseling agencies were reporting wall-to-wall customers (MBJ, Nov. 24, “Credit counseling agencies coping with increases in clients”).

For many, 2008 was a year of disappointment. Certainly, Pittman was one. She called her operation “special.”

“I have fought and fought for our manufacturing plant,” Pittman said in the Oct. 27 MBJ article. “We’re probably the last, if not one of the few, companies like us left.”

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.


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