Consumer spending mixed in Washington Co.

May 02, 2009|By ARNOLD S. PLATOU

WASHINGTON COUNTY -- When Paul Banister, Roger Martin, Mark Bikle, Mary Hoffman, Bill Cosner, Curt Spicher and Louis Thomas look at customers these days, they see economic strain.

But at each of their businesses, the financial toll is different.

Thus, while it is interesting new figures show that we -- you, me and everybody else hereabouts -- spent about 6 percent less in Washington County in February than we did a year ago, that is far from the whole picture.

The latest sales tax collections data from the Maryland Comptroller of the Treasury reveals a wide assortment of economic patchwork in the gloom that blankets the county.

In Washington County, spending actually looked almost rosy in February in the areas -- Food & Beverage, and General Merchandise -- where we generally spend the most money.


In total, our purchases at food and beverage-type companies increased more than 2 percent over the year-ago number, a Herald-Mail study of the data shows.

And what we plunked down for general merchandise held steady, which would seem no small accomplishment in this recession.

But some businesses even in those sectors are suffering, as are many companies in every other area of the local economy.

The Hardware, Machinery & Equipment sector, the smallest local spending area, got clobbered here in February, according to the state's tax data.

Total purchases in that sector plunged 37 percent below what was spent at such businesses a year ago.

Sales of furniture, appliances, and building and industrial supplies were in a slump, too. The data shows declines of 18 percent to 20 percent in local spending in those areas in February.

Making adjustments

"We've had some times that were tough, but this is by far the worst that I've ever seen it," said Paul Banister, manager of Noland Company's Hagerstown operation since 1998 and an employee for almost 30 years.

Noland, a subsidiary of WinWholesale Inc. of Dayton, Ohio, sells parts to plumbers, heating and air conditioning contractors, and industrial companies.

Banister said the decline began in the summer of 2006, after a fairly robust housing boom throughout the Tri-State area. With homes going up fast, demand was high for plumbing and other building supplies.

But nationwide in 2006, the market changed after the riskiness of subprime loans hit the news, loan credit standards tightened, foreclosure became a household word and housing prices slowed their ascent, then began to drop.

As the economy slipped, Noland tightened its control of expenses, reducing inventory at its Wesel Boulevard site, finding ways to make its processes and equipment more efficient, parking one of its trucks to cut gasoline expenses and even starting a cardboard recycling program, Banister said.

When such measures weren't enough, the company had to lay off some workers and not replace others who had left. Noland's work force here fell from about 16 employees a year ago to just 10 now, Banister said.

Of course, the economy has forced changes on Noland's customers, too. Plumbers who used to work only on new houses have switched to commercial work, which probably is Noland's strongest business now, Banister said.

"But in terms of dollar value, that still doesn't generate what new home construction did," he said.

Banister declined to say how much sales have fallen, but said he is "not at all" surprised on hearing the year-over-year declines in the local Building & Industrial Supplies sector of 20 percent in February, 34 percent in January and 20 percent in December 2008.

"Those numbers are indicative of where things are," he said.

Not all of the months have been terrible and the local operation still is profitable, but business "has been very severe since last September," Banister said.

It was so bad that one of his employees, wanting to avoid more layoffs, suggested Banister consider cutting workers' hours instead.

Banister endorsed the idea. And, in early March, most of the employees began working just 32 hours a week.

"I talked to our staff about doing that. They know the economy. They were willing to sacrifice roughly 20 percent of their income in the short term to keep everybody on board. They're still able to retain their insurance and all that sort of thing," he said.

"The economy is going to turn around," he added, almost as a promise.

Are you seeing something that indicates that will be soon?

"I haven't seen anything personally, but from what I've heard, they're talking about the third quarter possibly," Banister said.

"The experts we follow are saying the latter part of 2009 into 2010," said Chuck Manker, spokesman for Noland's parent company,

Not every business in the Building & Industrial Supplies sector is so clearly suffering.

Lowe's, for instance.

Though the state's data doesn't specify which company is in which sector, it does list the sale of lumber and building materials as part of that category.

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