Valley’s economy braced for crisis

By Bob Stuart

Published: September 29, 2008

The Shenandoah Valley is not experiencing the turbulence of the national economy, and local experts say discussions are alive about recruiting industry and expanding area industries.

Congress failed to pass a $700 billion financial bailout Monday. The 228-205 vote against included a dissenting vote by 6th District Congressman Bob Goodlatte.

“I believe there are other ways to help stabilize the economy,” Goodlatte said in a statement. “I am supportive of initiatives to require the Treasury Department to insure mortgage-backed securities, funding the measure through premiums provided by the industry, rather than on the backs of taxpayers.”

While things stay unresolved in Washington, the Valley economy chugs along during difficult times.

“There is a lot of activity from the economic development standpoint,’’ said Ben Carter, president and CEO of the Greater Augusta Regional Chamber of Commerce.

Carter and Robin Sullenberger, executive director of the Shenandoah Valley Partnership, said the Valley’s diverse economy tends to help it in times of slowing economic activity.

Sullenberger said the major employers in the area are also not directly affected by the market collapse.

“These companies are well capitalized. They know internally whether they can do an expansion,’’ Sullenberger said.

Sullenberger said while the Valley’s unemployment is generally lower than the 6.1 percent national rate, Valley unemployment numbers have steadily increased in the past several months.

“We are not seeing massive layoffs, but our unemployment numbers are creeping upward,’’ he said.

The area July unemployment numbers showed a 6.1 percent unemployment rate for Waynesboro, while Staunton stood at 4.4 percent and Augusta County at 4.1 percent.

The CEO of a Staunton company said his business has a national and international market, and said 2008 will mark the first year in the company’s history that it sold less product than the year before at its Staunton location.

Cadence, Inc., formerly Specialty Blades, makes cutting instruments for both medicine and industries.

Cadence CEO Peter Harris said “people are buying fewer things and when people are buying fewer things industrial orders are hard to come by.’’

Harris said the feedback has heard in the past several months from industrial customers “is that we will buy from you when we need product again.”

Harris senses the great anxiety about the economy, and he wonders the effects the changes in banking will have , such as Monday’s announced sale of Wachovia.

Wachovia, which has several Shenandoah Valley branches, will be sold to Citigroup in a transaction brokered by the FDIC. 

According to The Associated Press, Citigroup will have to absorb $42 billion in losses as part of the deal.

“Any time there is an industry consolidation it can affect jobs and humans,’’ Harris said.

Sullenberger said the conservative nature of the Shenandoah Valley is helpful in a stressful time like this.

“The fiscal conservatism in this region publicly and privately does work to our advantage. Neither local governments or businesses tend to take drastic action,’’ Sullenberger said.