WRAL Tech Wire

When will economy rebound? Not this year, new survey warns

Recession won't end in 2009, new survey says

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• UNC Kenan-Flagler
• AICPA
• Survey details

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RESEARCH TRIANGLE PARK, N.C. — If you thought the economic meltdown that’s evaporating share values worldwide faster than global warming is supposedly shrinking the polar ice caps is getting better soon, think again.

The money people – chief financial officers and certified public accountants – are now saying the U.S. recession is going to be worse than first projected. Those lines of Wall Street and Fleet Street executives with their hands out for government funds are going to be around for a while. And unemployment lines are apparently going to get longer.

"I had hoped we might see a bottoming out this quarter, but conditions continue to deteriorate, albeit at a slightly slower rate than last quarter," UNC Kenan-Flagler accounting professor Mark Lang said in the latest quarterly survey from the school and the American Institute of Certified Public Accountants in Durham. "Companies are feeling the effects all of the way through the business cycle. Most striking, the general malaise is prevalent in all sectors of the economy."

Mention the world malaise and I immediately think Jimmy Carter. Not to be political, but the last time we were in a fix like this was the late '70s and early '80s, with a misery index that baffled Carter and nearly KO’d the Reagan Administration.

If a trillion-dollar spending spree from Congress, another $800 billion in bank bailouts, plunging interest rates and government bailouts oversees can’t save the melting economy, what the heck will?

According to the UNC-AICPA survey that wrapped up Feb. 12, 83 percent of respondents were either "pessimistic" or "very pessimistic." And if the people writing the checks are that shaky – well, let’s just say these folks generally are frugal anyway. Now what?

Forget a recovery this year, at the least.

"As the recession has deepened and pessimism solidified, a majority of CPAs working in business and industry now don't expect an economic recovery before 2010," said the AICPA’s Arleen Thomas in discussing the latest survey’s results.

Some 41 percent of those financial experts surveyed said they don’t expect a recovery to begin until the first half of next year. Another 20 percent say a rebound will start in the second half of next year.

Back in November, some 40 percent of the financial gurus said the economy would begin to warm the second half of 2009.

And if unemployment is bad now, watch out.

They survey folks didn’t use the word layoffs, but catch this phrase: "more than 50 percent said that they expect the number of employees to decrease."

Already, 43 percent of the respondents said their firms have cut payrolls while almost half have implemented freezes on capital spending.

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…