2009 Economic Forecast: A Dark Tunnel, with a Light at the End

I attended the 2009 Economic Forecast breakfast put on by the Cincinnati and Northern Kentucky Chambers this morning. It painted a challenging picture.

Nationally, while the economist who spoke predicted several more quarters of tough times--and an overall down year in 2009--he did project that aspects of the economy should pick up toward the end of the year.

On a regional level, "it's going to be a rough year for the Greater Cincinnati economy." The economist predicted lower GDP, and lower employment for 2009. Again, she predicted that the decline will be most dramatic in the first part of the year, with the hope that things pick up in the latter half.

Both presenters placed strong emphasis on the importance of the stimulus in kickstarting the economy in 2009.

This forecast, combined with the news we received yesterday that our Local Government Fund allocation from the state was slashed $640,000 more than we had anticipated (and we had anticipated a large cut), and recent unemployment numbers, reinforces several things:

• we must continue to search for each and every way possible to kickstart the local economy
• with such turbulent and unpredictable times ahead of us, we must be incredibly conservative protecting our County reserve fund, and any general fund dollars
• I am glad that we projected revenues so conservatively going into the year -- assuming a 4% sales tax decrease (from the prior year) for 4 months, then a 2% decrease for each month following. Knock on wood--those pretty negative forecasts will hold.