March 17, 2010

Diverse economy expected to weather slump


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Staff Photo by John Ewing: 20080204 Monday, February 4, 2008....A large wind turbine is being erected in Saco to provide power for the new Amtrak train station being built there. Saco public works employees as well as workers from Entegrity Wind Systems began erecting the tower on Monday morning and are hoping to have it finished by Tuesday, February 5, 2008.

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Staff Photo by John Ewing: 20080204 Monday, February 4, 2008....A large wind turbine is being erected in Saco to provide power for the new Amtrak train station being built there. A large crane moves one of the sections of the tower into position on Monday afternoon.

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Staff Writer

Nowhere in Maine was the historic housing boom of the early part of this decade as pronounced as in the state's southernmost county.

Now that the real estate market has turned and the talk is of rising foreclosures and a possible recession rather than eye-popping appreciation in property values, it seems that York County might have farther to fall than other regions of the state.

But those who pay close attention to the local economy in southern Maine say they believe York County is well positioned to withstand a downturn in the housing market and business activity. They point to the region's diverse economy, a mix of manufacturing, retail and health care jobs, as one of its best defenses against a slowdown or a recession.

No one claims that York County is immune to larger economic trends in Maine or the nation. There has been a noticeable softening of the region's residential real estate market over the past year, and several local officials say that likely will continue into 2008. Those who watch the local economy say the region's retailers are reporting slower sales, and fewer companies are moving into the area.

But York County has not tied its fortunes to any single company or industry. For every segment of the economy that is looking weak, local economic development officials point to other sectors that are holding their own or growing. In addition, many people are looking to a few major ongoing projects as promising signs for future growth in the area.

''If we do wind up in a recession, I wouldn't expect it to be severe,'' said Jim Brayley, chairman of the Department of Business and Communications at the University of New England in Biddeford.

In Brayley's estimation, there is a 2-1 chance of the nation falling into a recession this year. As a member of the board of directors at the Biddeford-Saco Chamber of Commerce, Brayley said he is already hearing from local businesses who say their sales have begun to dip.

Nevertheless, the professor said he remained optimistic that York County would be relatively unscathed. He pointed to the region's mixed economy as one form of security. Another protection, he said, is a large population of wealthy retirees who have moved into the county over the last decade.

''They don't seem to be particularly influenced by some of the same things that would bother people who are gainfully employed,'' he said.

Southern Maine Regional Planning Director Paul Shumacher offered a similar view from the other side of the county. Shumacher, who is based in Sanford, recalled the region's last severe recession in the early 1990s and said there were key differences between then and now. In the 1990s, he said, a crash in the housing market was accompanied by a dramatic cutback in defense spending that led York County's largest employer, the Portsmouth Naval Shipyard, to slash its payroll.

Today, Schumacher said, the Portsmouth Naval Shipyard is on a steady keel and even hiring. Though the housing market has slowed down dramatically, Schumacher said the employment rate had not yet suffered. He said the local economy now has many more points of support than it had in the past and should be able to sustain a downturn.

''My sense is that while things may slow, it's not going to grind to a halt like it did in the early '90s,'' he said.

One place in York County that isn't showing any sign of slowing down is Main Street in Saco. On the north side of town, Elliot Chamberlain is set to break ground on the first phase of a 300-acre mixed-use development this spring. On the southern end of the street, a swarm of construction workers is transforming an old mill building into a brew pub as the first phase in a $100 million redevelopment on Saco Island.

The three-year project involves converting the old mills into loft condominiums and commercial space as well as building 30 townhouses and a marina on the eastern end of the island.

Just up the street from the mill redevelopment project, the city of Saco is building a new train station this year that will also serve as a bus station and the new home of the Biddeford-Saco Chamber of Commerce.

A 100-foot windmill erected next to the station early this month will provide its power. Biddeford-Saco Chamber president Bernard Featherman said he expects the landmark station also will generate economic activity throughout the twin cities.

''We believe that will give us a linchpin between the two cities to develop further,'' he said.

Even in Saco, though, Development Director Peter Morelli said there are indications of an economy losing steam. Morelli said the Island Point developers had originally planned to build out residential units but switched to commercial space because of the soft housing market. Out in the city's industrial parks, he said lots were selling much slower than expected and inquiries from companies looking to move to Saco were few.

In Biddeford, Economic Development Director Bob Dodge said he, too, believes the city's diversified job base will cushion the effects of a possible recession.

Three industries -- manufacturing, retail, and health care -- each account for about 25 percent of the nearly 9,000 jobs in Biddeford, Dodge said. Construction, which will be hard hit by the housing downturn, provides only 5 percent of the city's jobs.

Even if retail activity were to slow in a recession, Dodge said he sees signs of strength in the city's two other major industries. With an aging population of baby boomers, for instance, the city's largest employer, Southern Maine Medical Center, is likely to remain busy.

In the manufacturing center, Dodge said he believes growth among the nearly two dozen small businesses located in Biddeford could compensate for potential weakness among the city's two largest manufacturers, WestPoint Home and Interstate Bakery.

WestPoint laid off its second shift last fall and Interstate Bakery, the owner of the 600-employee Nissen Bakery near the Maine Turnpike, has been in bankruptcy for three years. Even if these one of these companies were to go out of business, Dodge said the city's smaller manufacturers, which added 300 jobs last year, could absorb many of the workers.

Recently, though, at least WestPoint has shown signs of stability. Early this month, WestPoint plant manager Al Davis said that orders for the company's blankets has strengthened. He said the factory will restore its second shift and up to 80 jobs by early summer if this demand holds up.

Staff Writer Seth Harkness can be contacted at 282-8225 or at:

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Additional Photos

click image to enlarge

Staff Photo by John Ewing: 20080204 Monday, February 4, 2008....A large wind turbine is being erected in Saco to provide power for the new Amtrak train station being built there. Workers position the base section of the tower on a concrete pad where it will be bolted down.


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