Regional business outlook for 2015

Last modified: 2/6/2015 2:29:40 PM
The national economy is continuing to rebound from the recession. The U.S. Department of Labor reported Friday that employers added 252,000 jobs in December. Unemployment fell to 5.6 percent, it’s lowest since June 2008. In the Monadnock region, unemployment in November 2014 was even lower. According to N.H. Employment Security, unemployment in Hillsborough and Cheshire Counties was below 4 percent. While omens for a strong 2015 are good, it’s not clear if this economic momentum means we’re out of the hangover of the recession just yet, especially in the Monadnock region. Unemployment might be low, but retail hiring is a mixed bag. Hiring in electronics and personal accessory stores are projected to increase in 2015, while hiring in anything from department to art stores is expected to be down.

Manufacturing, overall, might be down. But, specialized manufacturers in this region are starting to boom better than ever. And construction firms say the work is there, projecting they’ll be busy in 2015.

Although the housing market in the Monadnock region is behind more populated regions in New Hampshire, experts can’t agree on what next year will bring. Meanwhile, the Affordable Care Act is changing things up in the health-care industry.


An economic analysis prepared by the N.H. Department of Resources and Economic Development projects manufacturing will decline in Hillsborough and Cheshire Counties in 2015. According to this report, the manufacturing industry in the Monadnock region will experience a 1.9-percent decline, compared with a 1.1-percent drop nationally.

“There are certainly some manufacturing sectors that are growing, and others that aren’t. When you look at the total picture, it doesn’t look like a lot of growth,” said Carmen Lorentz, director of DRED’s division of economic development, on Thursday. “If you look at specific sectors, some seem to be doing quite well.”

Microspec Corporation in Peterborough is one of the latter, according to founder and manager Tim Steele. “We expect to see very significant growth in 2015, certainly more than 25 percent of what we did in 2014. It could be much greater than that. It all depends how certain things fall in line,” Steele said by phone Friday.

Steele compared Microspec, which primarily produces parts for medical devices, to other manufacturers, saying, “We’re going the opposite way. We actually have been for quite some time. Our client base in the last two years has at least doubled, possibly even tripled.”

One client Steele said Microspec expects to benefit greatly from is an international cigarette company Steele declined to name.

Steele also spoke about how Microspec and other companies in the medical industry have been buffered from the economy.

“The medical industry has historically been immune to the ups and downs of cyclical economies,” he said. “People just keep getting sick. There is also pressure to improve medical devices and technologies.”

To accommodate their business, Steele said Microspec is expanding their facility on Route 202 South in Peterborough once again. They are building on two levels on the north end of the 327 Jaffrey Rd. building.

Steele said they are constantly hiring, and they are currently looking to hire scientists, engineers and manufacturing operators. But, Steele said, “until our new addition is opened up, much of that cannot happen. We are out of space.”

Lorentz said another manufacturer that will likely see growth in 2015 is New Hampshire Ball Bearings, Peterborough’s largest employer. The ball bearings manufacturer announced it is projecting growth over the next five years because of opportunities it sees in the aerospace industry.

“Those new programs are the lifeblood of our future business,” Hans Baker, NHBB’s marketing director, said by phone in late 2014.

Asked how this will impact Peterborough, Baker said, “Our business is healthy, which is good for the workforce, and good for the economy.”

NHBB — a subsidiary of the Japanese corporation Minebea Co., Ltd. — manufactures precision bearings and complex bearing assemblies for the aerospace, defense, medical, dental and hi-tech industries. NHBB’s projected growth, which Baker said would allow them to expand the workforce, particularly with more skilled workers.

Lorentz said specialized manufacturers are replacing positions, rather than expanding. Lorentz found manufacturers and retailers are hiring, but it’s because employees are retiring and those positions are being filled.

In the manufacturing industry in Hillsborough and Cheshire Counties, the second largest age demographic of employees is 55- to 64-year-olds. They are 22.1 percent of the workforce, while 45 to 54 year olds are 32.9 percent of the workforce. “It’s really a statewide issue we’re hearing about in manufacturing all the time,” Lorentz said. “It is an older workforce. I have heard from some manufacturers that over half their workforce is actually nearing retirement.”

Construction industry

Construction is much busier than usual this winter, which professionals say is a good sign of what’s to come this year.

Phil Mathewson, president of Mathewson Companies of Hancock, said they have much more winter work than in year’s past. He hopes this increase is because the economy is improving.

In general, Mathewson said, indications of a busier winter carry over into the spring and summer. Mathewson Company has three large projects in Peterborough. They are currently sealing the lagoons at Peterborough’s Wastewater Treatment Plant, completing the site work at the solar array field, and building a new church for the Divine Mercy Parish, also in Peterborough.

Mathewson said these projects are employing local workers through the winter. He said they have 21 employees working on these three projects.

Microspec contracted their expansion work to Ingram Construction Corporation in Swanzey. Stephen Ingram, an estimator for the construction company, said that besides this project, Ingram Construction has a handful of wintertime projects in Southwestern New Hampshire and Vermont.

The bottom line,” Ingram said, “is there a lot of opportunities out there.”

He said their workload has slowed down for the winter, which is expected. But Ingram said that from what they know, have heard, and have seen, there will be a lot of springtime and summertime work.

Ingram said this increase in business has everything to do with an upswing in the economy.

“Certainly for business, the signs have been good,” he said. “Maybe not as promising for Main Street as for Wall Street. But nevertheless people, not just individuals, but business owners, are feeling a little bit more confident that we’re regaining some strength, that actually, we’re doing better than other areas of the world.”

Ingram Construction’s handful of wintertime projects, including Microspec, have allowed them to keep their workforce from the summer into the winter, Ingram said. “We don’t like to hire people for the construction season and warm weather, and lay them off when it gets cold. We like to keep people going year round.”

Another notable project in the region is the rebuilding of the Jaffrey Park Theatre on Main Street. The historic theater was torn down this fall, and will be rebuilt in the Art Deco style, hopefully in time to be open for business in spring 2015. 

“We think it will be an economic boom for the area,” said Trustee Kevin Hampsey recently at a Temple Select Board meeting. “As an example, when you go to ski at Crotched Mountain, you don’t just spend money at Crotched. You buy meals, or gas on your way through.” Theater trustees have estimated that within the first year, there will be 26,000 people who visit the theater.

Home isn’t necessarily where the heart is

The Federal National Mortgage Association, or Fannie Mae, reported on Dec. 18 that nationally, the housing market is likely to continue climbing after a lackluster 2014. “We anticipate a fairly strong increase in housing starts, in response to stronger employment and some improvement in related household incomes,” said Doug Duncan, Fannie Mae’s chief economist in a recent news release.

But Larry Alvarez, president of the Contoocook Valley Board of Realtors, isn’t expecting housing in this region to improve next year. He said by phone Thursday that he hopes housing will rebound the following year.

After a downswing in the economy, Alvarez said, “That recovery takes longer than the fall took. The collapse of the market, unfortunately, goes faster than the rebound.”

Alvarez acknowledged that real estate sales around Manchester, Nashua and Portsmouth improved just in the spring. Alvarez said this increase only occurred in the spring, because not many houses in these cities were for sale.

“What’s amazing is that some towns were much stronger in sales. Other towns failed. They had less sales,” Alvarez said about the Monadnock region. “Everybody is saying the market is getting better. It depends on what town you’re in.”

Alvarez referred to CVBR’s tally of housing sales in 2014 compared with 2013 in the various towns it serves. In Peterborough in 2013, 59 houses were sold. In 2014, 105 houses were sold.

In Jaffrey, 72 houses were sold in 2013. In 2014, 60 houses were sold.

Alvarez said differences in taxes between the towns might account for the growth of the housing market in Peterborough compared to Jaffrey. Several of Alvarez’s customers chose Rindge over Jaffrey, because Rindge’s taxes are lower.

Alvarez also said that in the case of Peterborough, “Sellers out there realized if they wanted to sell, they had to reduce their prices.” He said that in Peterborough, the economy didn’t impact the housing market in any major way, other than sellers reducing their asking prices.

Andy Peterson of the The Petersons Country Real Estate in Peterborough is looking forward to a successful spring for housing sales.

“The spring market is typically the strong. Here we are in the dead of winter, it’s 20 below. It’s still pretty active out there,” Peterson said on Monday.

Peterson said housing sales in Peterborough have been very active, from Thanksgiving and particularly the beginning of the year. Another indicator of future success, Peterson said, is that the number of quality houses in a good price range is thinner, meaning more customers are buying.

“In terms of mapping out a trend as a result of that for the future, I’d think you would be more accurate with the energy and activity you’re seeing in the market now that I believe foretells a strong spring,” he said, adding, “It’s not that the economy or anything major changed to change the market, other than prices.”

Alvarez noted that it’s a great time to buy because his customers are not having any trouble being approved for loans. He also has heard interest rates might increase, which would slow sales.

What’s ahead for health?

Richard Scheinblum, Monadnock Community Hospital’s chief financial officer, said people can expect health care costs to continue increasing in 2015. “The days of the $5 copay are over,” Scheinblum said Monday.

General market conditions, not the Affordable Care Act, are increasing people’s deductibles. “We’ve seen that moving that way for a while,” Scheinblum said, noting those with health coverage through commercial plans or ACA’s health exchange can both expect their health care costs to go up.

MCH is expecting no major economic growth next year, because they anticipate the net patient service revenue will be flat. “The industry at this point, because of the Affordable Care Act, we’re in a lot of what I would say flux,” Scheinblum said.

Scheinblum said most health-care organizations in New Hampshire and nationally are trying to adjust to changes being brought about by the government. “Over the next three to five years, I’m expecting this isn’t going to end,” Scheinblum said. “We’re expecting either through cuts in reimbursements or other pressures that this isn’t something that’s a one-year thing. This is something that’s going to continue.”

To brace for this decrease in revenue, MCH is estimating it will lose $7 to $8 million in revenue over the next five years.

Tourists, buy local

Lorentz isn’t surprised that the analysis she prepared shows the retail industry will improve this year.

“Manufacturing drives the economy. Retail follows the economy,” Lorentz said. “It doesn’t surprise me that more people spending more money is reflected in jobs at retail establishments.”

In her analysis of 69 retail industries in Hillsborough and Cheshire Counties, it is project there will a be a 0.3-percent increase in retail hiring.

Sean Ryan, executive director of the Greater Peterborough Chamber of Commerce, isn’t surprised either.

Ryan is expecting success next year because he and other retail and tourism leaders in this area are branding the Monadnock region as somewhere to experience New England.

“We’re looking to promote the downtown atmosphere,” Ryan said. He said tourists often look at the Monadnock region and New Hampshire as somewhere to buy “quintessential New England gifts” as vacation souvenirs.

Ryan said the Greater Peterborough Chamber of Commerce, the Greater Keene Chamber of Commerce, the Monadnock Travel Council and the Greater Hillsborough Chamber of Commerce are all working with the N.H. Department of Resource and Economic Development on promoting the Monadnock region. Ryan said that New England as a whole is experiencing a lot more interest from foreign tourists. He mentioned tourists from Great Britain, Brazil Uruguay and Columbia, because the United States has softened its visa requirements. It also helps, Ryan said, that New Hampshire is free of sales taxes.

While the Greater Peterborough Chamber of Commerce and other organizations like it are promoting the Monadnock region’s New England character, economic development organizations, like Peterborough’s Economic Development Authority, are exploring ways to boost the area’s business appeal. The town of Wilton is also looking to revise its Master Plan to encourage more businesses to relocate there. Melanie McDonald, executive director of TEAM Jaffrey, is also involved in regional initiatives to promote tourism in the Monadnock region.

McDonald said on Monday that the start of 2015 is slow for Jaffrey’s downtown retailers, but expected. To compensate, McDonald said several retailers are offering classes to wrangle in more business. She said the weather will contribute to how the rest of winter plays out.


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