[January 08, 2009]

Outlook sunny despite the storm Leaders see sun after the gloom Triangle forecast: gloomy, then sun Wake leaders see sunshine despite the rain:...

(News & Observer, The (Raleigh, NC) Via Acquire Media NewsEdge) Jan. 8--RALEIGH -- Striking a mostly optimistic tone, economists and business leaders predicted Wednesday morning that the Triangle remains well-positioned to ride out the recession.

But there was no mistaking the gloomy short-term prognosis that pervaded the Greater Raleigh Chamber of Commerce's annual economic forecast session.

"We're in the teeth of this recession," John Silvia, chief economist with Wachovia, told the crowd of more than 600 people.

He expects the national employment report Friday to show, for example, that companies cut more than 500,000 jobs in December. That would bring the 2008 total to 2.4 million jobs lost, the most since 1945.

But that "could mark the end of the downdraft," and pave the way for economic recovery in the second half of 2009, he added.

Silvia's remarks followed other cautiously upbeat comments Monday at an economic forecast lunch held by the N.C. Bankers Association and N.C. Chamber.

Among other highlights from the meeting:

ON HOUSING: Another economist, Matthew Martin with the Federal Reserve Bank of Richmond, pointed out that before the economy can begin to expand, there needs to be some stability in the housing market.

He expects that to happen later this year -- but Martin was quick to admit it's something he has predicted would occur in each of the past three years.

Through government efforts, Martin added, the "remedies are in place" although they'll take some time to work. "Sometime in the not-too-distant future," he said, "you can expect the economy to find its footing."

ON POSITIVE ASPECTS OF A RECESSION: Silvia said a severe downturn is a great time for businesses to get "lean and mean" and look for new ways to win business from competitors.

One catch is that many business leaders and government officials weren't in charge during the early 1980s, during the most recent U.S.recession of this magnitude.

"This is a much more significant challenge to your planning and expectations," he added.

ON THE TRIANGLE'S HEALTH: Martin, Silvia and other speakers, including WakeMed CEO William Atkinson, said they're confident the Triangle remains relatively strong compared with the nation and state.

They pointed to this region's continuing population growth and the concentration of stable jobs in government, health care and education.

"We have lots of young, smart and qualified people moving to this area," Atkinson said. He added that his hospital system is getting 3,800 qualified applicants each week for open positions.

ON WACHOVIA'S FUTURE: Phil Zachary, president of Raleigh-based Curtis Media Group, which owns 19 radio stations, got enthusiastic applause when he did a bit of cheerleading for the Triangle's biggest bank.

Wachovia was bought by Wells Fargo last week, but Zachary pointed out that customers, workers and investors were "very afraid" last summer that it might go bust.

Although that didn't happen, Wachovia's shareholders lost billions, and the bank's employees are bracing for big layoffs. The cuts will hit Charlotte the hardest, but Wachovia's 2,300 workers in the Triangle could be affected, too. The Wachovia name, on a sponsors' banner above Zachary's head and atop one of Raleigh's largest office towers, will likely disappear.

"It's good to see Wachovia on the other side of 2008," he said. "We at Curtis Media are pulling for you."

ON FREE VIAGRA: Silvia got a few laughs during the generally somber event. At one point he began to rant about rising health-care costs as one of the top challenges businesses and politicians will face in the coming years. The aging population all "want new hips so they can go out dancing," as well as "quadruple bypass surgeries" and "free Viagra," he said.

"Who's going to pay for all that?" he asked.

alan.wolf@newsobserver.com or 919-829-4572

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