Looking for something to celebrate this Labor Day?
Well, take heart that the worst of this nasty economic storm just might be over.
That doesn't mean that all of our economic worries are behind us, but there are encouraging signs that we've already endured the fiercest part of the battering that the Great Recession is dishing out.
The first hopeful sign came last week, when a survey of local purchasing managers reported that the Buffalo Niagara region's manufacturers actually started growing again during August. It was the first time that the business activity index of the National Association of Purchasing Management -- Buffalo had shown growth since last September, just before the economy began its free-fall.
That prompted Niagara University economist Mikhail Melnik to declare that "the region is out of recession and the manufacturing sector is expanding."
But that doesn't mean Melnik expects a quick recovery. To the contrary, he thinks the economy will stabilize for a while, essentially treading water, before beginning a mild rebound that likely won't include the creation of many new jobs -- at least not for a while.
"Nothing's in free-fall anymore," says Douglas P. Taylor, the chief executive officer at North Tonawanda shock absorber manufacturer Taylor Devices. "Before it was."
Yet there are still plenty of concerning signs that indicate the local economy still is far from being out of the woods, namely the continued decline in the region's job market and the generally downbeat outlook of consumers, whose spending accounts for about two-thirds of all economic activity. A jump in commodity prices could slow the recovery, too.
What's more, Melnik notes that much of the pick-up in the economy is due to government-related spending, from the stimulus program to the recently concluded "cash for clunkers" program that produced a spike in new vehicle sales in late July and August.
It was the spurt of activity in the region's struggling auto industry that played a big part in the growth noted by the purchasing managers in August. Local plants ramped up production after extended shutdowns or cutbacks in the spring and summer.
The big question in the coming months will be whether the "cash for clunkers" program truly stimulated new vehicle purchases, or simply gave consumers a reason to buy a car they already planned on purchasing a few months ahead of time.
"The effect of this program is somewhat unclear," Melnik says. "The recovery is being completely induced by the public sector at this point. There is no private sector support in the recovery effort yet."
So we're still on shaky ground, and it's not unusual for recoveries to move in fits and starts. The last recession, which started in 2001, is a good example of that.
During that downturn, the local purchasing managers index turned negative in February 2001 and declined for 13 straight months before finally showing growth in March 2002. But it wasn't all positive after that. The index showed growth in only four of the following nine months and didn't turn consistently upward until January 2003.
The job market is likely to take even longer to recover, because employers now benefiting from much higher productivity from their shrunken work forces are likely to wait until a recovery has firmly taken root before adding more workers.
In the last recession, the local job slump essentially lasted three years. The region started shedding jobs in February 2001, just as the purchasing managers index started its downward trend, but the job losses continued unbroken until August 2002, when a brief five-month growth spurt took hold, only to give way to another decline that lasted from January 2003 to February 2004.
So this Labor Day, we can celebrate the light at the end of the tunnel. It just might be a while before we get through it.