A good friend of mine was laid off recently. She had been a successful, dedicated employee for her company for 12 years, but returned from the holidays to learn her job had been outsourced. It's one thing to read about job layoffs around the country and quite another to watch someone you care about cry.
I know she experienced a mixture of sadness, fear and anger over having a major portion of her world ripped away. I felt a similar trilogy of emotion at her plight, coupled with a surge of guilt over the fleeting thought: "I still have my job."
My friend was working in the world of advanced technology. In 2000, her company saw phenomenal, record growth. In 2001, it saw a phenomenal, record bust. Fly high, fall hard.
That's not something you see in the water business. The municipal water/wastewater industry is not exactly a volatile market. In the past several years, while the US economy boomed the water market saw a slow, steady annual growth of 3-5 percent. Now that the national economy has fallen on hard times, will the water market follow?
The municipal market does rise and fall in its own glacial rhythm. I recently attended a meeting of the Water and Wastewater Equipment Manufacturers Association and they were nervous about the state of the equipment industry. Oddly, their fear was not with the current water market. Most said business was good right now but they were concerned about next year. The consensus opinion was that the municipal marketed lags behind the national economy by 12 to 18 months.
There are some indications that the national economic slowdown has begun to impact the water industry. Some larger and discretionary projects are being placed on hold while city planners watch the economy. But at the same time there's a lot of construction, rehab and expansion going on at utilities across the country.
There is some hope that if the national economy stabilizes fairly quickly, the municipal water market won't react at all. I think that's probably a vain hope. Water industry planners are like everyone else: they react to bad economic news by planning conservatively. However, any slowdown in spending that does occur in the municipal water market will be in the single digit percentage range, in my humble opinion.
The economic slowdown we've seen has been strange. I may lead a sheltered life, but aside from a nasty drop in the stock market that put a hole in my 401K, I haven't seen much of an economic collapse. I think we've been spoiled by the high-flying 90s. What we're seeing now is a return to normalcy.
Yes, there have been layoffs and consumer spending is down. City budgets are shrinking as a result. The stock markets dropped from astronomical highs, but they seem to have stabilized at a fairly high level. Interest rates are lower than they've ever been in my adult life and that seems to be helping. The unemployment rate is creeping back up, but it's still not high.
All things considered, I say the country is doing fine. I think we should move forward with a mixture of hope and caution: Hope for a solid future and caution enough to keep a few extra dollars in the bank just in case. That's never a bad policy even in good economic times.
James Laughlin, Editor
