Local Economy Hard to Forecast

Some business owners predict strength, others remain uncertain

By Michael Turton

Patrick Cummings’ iGuitar Workshop is as local as a business can be given its Main Street Nelsonville location. Yet the main market for his custom-made guitars can only be described as global.

Patrick Cummings of iGuitar

Patrick Cummings of iGuitar

“Most of my business is completely outside this area,” he said, listing Japan, England and Australia as some of the typical places his customers call home. He also does business across the U.S. “I just had someone in Georgia buy his 25th guitar from me.”

Cummings’ views on the local economy going into 2014 reflect those of a number of other area businesses recently contacted by The Paper. “I’d say things have continued to progress since coming out of the recession,” he said. “The improvement in 2011, ‘12 and ‘13 has not been amazing – but it’s coming back – it was in the toilet.”

He expects the modest improvement to continue. “I think it will continue to inch forward – just not as fast as I’d like.” Cummings has thoughts on what might hasten the upward trend for small business. “If the people running the country could get along, if they could work together more sensibly, it would help small business.”

And locally? “It would be fabulous for business if right at Route 9 and Route 301, and even at the Taconic, something beautiful could be put in place saying ‘Welcome to Cold Spring.’” He suggests that attractive, landscaped signage should include terms such as “business district, restaurants, shops and live music” – giving drivers a reason to turn toward the village.

Consumers adjust

Nicole Giachinta established the Nicole Brooke Salon in Philipstown Plaza on Route 9 in April 2012.

“It was definitely slow at first,” she said. “But business really started to pick up about six to nine months after we opened.” Still she sees caution in current spending habits. “People are extending the time between cuts. They’re spending less, doing their own coloring, buying less product.” Giachinta, who has been cutting hair for 11 years, said that’s very different than just a few years ago when consumers got their nails done and hair styled, “as a matter of routine.”

Yet Giachinta is very positive about the year ahead. “I think it is going to be a really good year if it keeps going the way it has been.” Some of that optimism comes from the fact that while people are spending less, her customer base has increased. “I’ve built up a large clientele.” She has also kept a close eye on overhead. She cut back on advertising but has been able to promote her business through word-of-mouth – especially via social media. “Facebook has made a huge difference,” she said.

“Are we affected by the national economy? Absolutely … business is off a little, but not a lot … it’s been mediocre.” That’s how Jim Matero summed up the state of his business, Jaymark Jewelers, located on Route 9 north of Philipstown Plaza. He said that business was a little worse in 2013 than the year before. “I don’t know if it’s justified – but consumers have a lot of fear, uncertainty. People are nervous.”

Like Giachinta, Matero said that consumers have changed. “As people feel their budget tighten – they sell more,” he said. Jaymark purchases gold, silver, platinum and diamonds directly from customers. “We also see a lot more jewelry repair and remodeling work. People save money doing that.” As to what can be done to improve the economic climate, Matero is unsure. “It’s a complex question. The economic formulae are very complicated. It’s going to take a lot of time.” While he doesn’t have a strong gut feeling about the year ahead, he is guardedly optimistic. “We have a chance to be better than in 2013. I anticipate a better year.”

Each year a little better

Expanded Supply Products Inc. (ESP) is also located along the Route 9 corridor. “Last year was better than 2012,” said owner Bruce Kehr. “It’s improved over the last couple years. Not a lot – but it improved.”

Bruce Kehr, owner of ESP Inc.

Bruce Kehr, owner of ESP Inc.

ESP specializes in excavation, highway, water and sewer supplies – doing business over a wide area from northern New Jersey and Rockland County to Westchester County and western Connecticut. “And we just shipped pipe and filter fabric to Florida,” Kehr said. “Each year has been a little better – five to 10 percent. That’s better than going the other way.”

The cause of the slow recovery? “The Obama administration hasn’t helped us, that’s for sure. There’s no jobs. Nobody’s spending money.” Kehr said there are “shovel-ready” projects pending but no money to get them started. “The (federal) stimulus money for infrastructure projects was a good idea – but it didn’t happen,” Kehr said. “You have to wonder where the money went.” Money wasn’t an issue six or seven years ago he recalled. “The phone never stopped ringing. Price wasn’t much of a factor. People just wanted it done – now.”  The new “now” is very different. Kehr said that bids are looked at very carefully these days. “Price is a big issue now.”

Tires or food?

Like jewelry and hair styling, motorcycles don’t exactly qualify as necessities. “2013 was a strange year – unpredictable,” said Mike Schwartz, owner of Phat Custom Motorcycles located on Route 9 north of Route 301. Phat builds custom-made motorcycles, repairs and services bikes and sells related products. “In September (2013), when the government shut down, the phone just stopped ringing.”

Despite a beautiful fall, usually a boon to bike riding, Schwartz said the custom motorcycle industry took a nosedive. Spending slowed. Some of Phat’s vendors closed their doors. “Money spent here isn’t for something you have to have – it’s a luxury item, a toy,” he said. Gone are the days when easy-to-come-by home equity loans translated into sales for Schwartz. “When people say ‘Am I going to put tires on my motorcycle or food on the table’ – what are they going to do?” he asked. “People hold onto their money when they get nervous.” Schwartz isn’t down or up about the future – he just doesn’t know. “I have no clue. I wish I did. I don’t know what it’s going to be.”

Savvy homebuyers

The slow but gradual recovery alluded to by some business owners seems to hold true in real estate as well. Sylvia Wallin, manager of Houlihan Lawrence Real Estate in Cold Spring said that sales increased slightly more than 20 percent in Philipstown last year, although the total value of sales increased by only about five percent. She is “cautiously optimistic” about 2014. Wallin said that the young buyers who move from Manhattan to Brooklyn and then to Philipstown are very savvy, cautious and wanting a good return on their investment.

Melissa Carlton, an agent in the same office, feels much the same. “Buyers coming into the market all know someone who lost significantly in the last crash,” she said.  While people may not expect an actual guarantee, they do want to be confident their investment won’t lose value,” Carlton said. “I’m optimistic that it will be a good year,” she said, indicating that first- and second-time homebuyers want to take advantage of continued low interest rates, although financing can be a challenge. “You need a bit more to finance now,” she said. On the other hand Carlton said that in the wake of the backlash following the mortgage crisis, major banks have begun streamlining the loan process.

Light at the end of the tunnel?

At least in this small sample, there was no overwhelming pattern as local business owners tried to predict how the economy will behave in 2014. Repeated predictions included terms such as  “nervous,” “progress,” “uncertain,” “better” and “slow.” Some expressed optimism, if somewhat guardedly. One owner who asked not to be named referred to media reports that indicate there is now “light at the end of the tunnel” when it comes to the economy. “But you wonder,” the dubious business owner said. “Is it light at the end of the tunnel? Or an on coming train?”

Photos by M. Turton

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