It’s not often that an economist draws “yays” and a loud applause from a crowd. But the Long Island Association’s chief economist did just that Tuesday when she uttered words that cheered the audience at a tech group’s luncheon at the Huntington Hilton in Melville.
“I bring you better news than we’ve heard in the past,” Pearl Kamer, the Long Island Association’s chief economist told those gathered for the annual technology showcase and forecast of the local chapter of the Association of Information Technology Professionals. But given the slow pace of the economic recovery, she tempered her words.
The goods news, she said, is that the recession is over -- ending officially in June 2009.
But “the bad news is that the recovery will take a very long time,” she said.
The U.S. economy added 151,000 jobs in October, the first time since May, she said referring to a government report issued earlier this month. And business investment rose almost 4 percent in the third quarter, the first increase in two years, she said.
“When coupled with the fact that third-quarter profits by companies in the Standard & Poor’s 500 index rose by 24 percent from a year ago, these figures suggest that U.S. businesses may finally be ready to increase their spending in plant and equipment and to begin hiring permanent workers,” Kamer said.
But the job market will mend slowly. While 151,000 jobs may seem like a lot, she said, it takes 100,000 new jobs per month nationally to accommodate new labor force entrants and 300,000 monthly to make a dent in unemployment.
The Island has shown signs of being on the mend, she noted. Long Island, housing prices are no longer in a free fall she said.
“Housing prices are again rising in Nassau but are still flat in Suffolk,” she said.
Median home prices in Nassau were 6.3 percent above year-ago levels in October, she said.
She also noted that inflation in the New York region, which includes Nassau and Suffolk, has been declining for most of this year. It fell from 2.4 percent in January to 1.2 percent in September, and further declines are possible.
“This may help stimulate holiday sales on Long Island during the upcoming holiday season,” she said.
But state and local governments, including school districts, are cutting jobs because of revenue problems.
“They have to cut back and this will be a drag on the economy,” Kamer said.
But she said that Long Island should begin to do well during the recovery.
“It was not hit as hard as the rest of the nation during the recession and has unique competitive advantages for many of the emerging technology-based industries and for the health-care sector,” she said.
Gary Huth, the State Labor Department’s principal economist for Long Island, who also spoke, said that Long Island has weathered the recession better than the rest the country. It has a 6.9 percent unemployment rate, vs. 9.6 percent for the nation, for example.
And he said that the high-tech sector holds the key for future growth here with the pending federal mandate to digitize medical records.
Technology “is the main driver of the economy going forward,” he said. “Long Island has a history of integrating technology into a broad array of businesses.”
But, Kamer said, the Island has to become more attractive for business.
“It is necessary to make Long Island more hospitable to businesses by holding the line on taxes and training and retraining the work force so that their skills match the needs of emerging jobs,” she said.
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