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Business Extra: Monadnock Region economy

  • Jeanne Dietsch and Lee Nyquist debate for the Democratic nomination for District 9 State Senator at FPU on Sept. 6, 2016. (Brandon Latham / Monadnock Ledger-Transcript) Staff photo by Brandon Latham—Monadnock Ledger-Transcript...

  • Restaurants, shopping, theater, cultural and musical offerings -- and beautiful foliage -- bring tourists to the region. Staff photo by Brandon Latham



For the Ledger-Transcript
Tuesday, January 17, 2017 9:52AM

National GDP growth and home sales rose to their highest level in a decade last year. The Monadnock Region economy turned upward, too, but we’re still pedaling hard to move uphill.

Tourism plays a critical role

The good news is that every year we see a few more tours and independent travelers come through our town. We also have a lot of people coming in who just drive in for the day. In all, 2016 was a great year and 2017 looks very promising. It’s impossible to track exactly how many tourists visit the eastern Monadnock Region each year, but tourism is definitely on the uptick and we expect that to continue into the new year and beyond.

Visitors come to our towns to experience beautiful New England villages. Many have charming historic downtown districts with plenty of restaurants and shopping. Our theater, cultural and musical offerings are on a par with cities’. We’re also less than a 90-minute drive from Boston and western Massachusetts.

As a consequence of tourism and better local wages, restaurant revenues rose this year. Parker House Coffee at Noone Falls increased hours from four to six days a week. The Wreck Room, despite closing for weeks because of plumbing issues, has attracted much attention as a music venue. A planned brewery in the former GAR Hall and an Irish Pub across from Harlow’s promise to attract more youth in the coming year. However, the number of restaurants and take-outs, in Peterborough at least, may be exceeding saturation, with four new restaurants opening in 2016. The abundance of offerings should draw more tourists, but competition for loyal midweek locals will be fierce.

The Rooms and Meals tax collected in the Monadnock region for calendar year 2015 was up 11 percent over 2014 and 2016 is averaging a 9 percent growth over 2015. According to the State’s Travel Barometer, the restaurants in the town of Peterborough have seen a 10.6 percent growth in taxes paid in 2016. There are not enough citizens in our town to support the businesses and that is why we need to bring outsiders in to spend money in our area. We need to ensure that our venues, stores, eateries, services and manufacturers take advantage of available resources if we want to thrive along with the Lakes Region, White Mountains and the Seacoast. The state offers extensive free publicity to thousands and thousands of tourists from its VisitNH site. Our goal for the new year and every year is to continue to shine a light on the eastern Monadnock region, bring visitors in to spend money in our restaurants, shops and help preserve our way of life.

Population is increasing

Like the rest of the state, we appear to have had more people moving in than out for the first time since the recession. A few new construction permits are being issued. Housing sales are up significantly for a second year in a row, but prices are no longer rising. Homes over 2,600 square feet and homes without good Internet access remain difficult to sell. The new Peterborough Welcome Team, led by Karen Hatcher, attracted 70 new residents to a Town House welcome party this fall. Although Conval High School enrollment dropped again, the pre-school/K/elementary school population rose for the second year, by 6 percent.

Commercial space is plentiful

Warehouse space is still emptying, but small manufacturing companies are taking the opportunity to move in at below-list prices. Office space, however, is not moving. In fact, information companies are closing offices so employees can work from home. The number of telecommuters in the region is in the hundreds and growing. They work remotely for companies in Scotland, Switzerland, Germany, Silicon Valley and other parts of the US as well as employers around the state.

Some commercial leasing companies have woken to the new reality. Harrisville Mills has attracted entrepreneurs with affordable live-in startup space. Other old mill spaces are being turned into condos. MAxT Makerspace may expand its space to offer incubator and business support activities. But are these conversions keeping up with the number of office spaces coming on the market? Probably not.

Uncertainty requires innovation

Meanwhile, our hospitals exist in an environment of uncertainty, with the future of public medical assistance programs in question. Loosening regulations let pharmacies cherry-pick the most profitable tasks of healthcare that used to help support emergency and other less profitable services. Hospitals are looking to tele-medicine as an opportunity for improved service and greater productivity, but this relies on universal broadband access.

Yet our state has risen to 10th most innovative in the nation, according to Bloomberg. The manufacturers who survived the downturn are those who developed premium products that support American-level wages. Their challenge now is to maintain that edge, whether it’s Monadnock Paper Mills developing new construction backing and medical filter papers or NHBB’s designing custom precision bearings and assemblies.

Workforce shortage affects growth

Maintaining competitiveness requires skilled people and creative talent. Nashua Community College plans to offer Voc-Tech Training in a new facility across from Conval High School. UNH has built a materials simulation and testing lab to train interns and help companies increase global competitiveness. The NH High Tech Council is starting a medical markets special interest group to help our state attract biotech and medical device talent. We need to encourage more manufacturers to join those already taking advantage of such resources.

Attracting workforce is the issue that drives much of business and economic development now. For instance, senior care has become the area’s leading growth industry. Yet growth will stop if facilities cannot find the workers they need to fill openings. As part of Peterborough’s Master Plan development, volunteers surveyed dozens of key companies at the end of 2016. Companies in healthcare, senior care, manufacturing, construction and software almost all reported that attracting workers is a chief difficulty. Wages have risen significantly as unemployment levels here dropped. A construction company reported that wages have risen $2 per hour. One employer reported “We pay wages 30 percent higher than average so we have no difficulty attracting employees.” Another described the company’s generous benefits packages and a belief that “If our workers are happy, our residents will be happy.”

Workforce shortages are not unique to this region. However, property taxes in some Monadnock towns drive potential workers away. This may be why employers report that the quality of professional and executive applicants is quite good, yet they cannot find entry-level employees. As the state cuts business taxes and revenue-sharing, towns must shoulder more of the expenses. Hence, the town share of property taxes has risen sharply. But public education costs have risen even more steeply.

Education costs, property taxes impact housing costs

Two major factors drive school costs: health insurance and administration/operations. One proposal to lower health insurance is for the state to combine educators into a pool with other state workers, but that is unlikely to happen soon. Proposals to close some schools to lower administrative and operational costs have been turned aside. Yet until we figure out a way to better educate our children for less money, our region will not be able to compete for young workers. The cost of living here will continue to exceed area wages.

Volunteers from planning, zoning and the Economic Development Authority are trying to provide lower cost housing. The New Villages group is proposing new zoning regulations to make housing less expensive. The EDA’s workforce housing group is striving to rehab a building to provide lower-cost housing units. Unfortunately, these efforts may be too little, too late. In Keene, the Colony Mill is being rehabbed into 90 apartments in an effort to attract younger workers. And Laconia has hired a former director of the state Division of Economic Development to run its Land Trust and spur affordable housing development. Laconia is home to the other New Hampshire division of NH Ball Bearing, which is unionized, and thus competes with the Monadnock region for workers.

Housing costs are not the only problem. While most commercial/industrial areas of the region have excellent broadband, workers expect good broadband access at home, according to Realtor Heather Peterson. Large swaths of the Monadnock Region still lack adequate access; this reduces a property’s value by 20 percent or more. Businesspeople, town officials, economic development officials and realtors from Peterborough and Keene headed to Concord last Thursday to push for the right for towns to bond broadband projects, but this is only a stopgap measure. Will federal infrastructure moneys address this problem in 2017? We can all encourage our elected officials to make it happen.

Regional collaboration key

In the past, our towns have largely gone their separate ways. The Peterborough EDA launched a talent attraction program this year. The website PeterboroughWorks.com targets young adults from urban areas seeking better work-life balance and quality of life. A complementary video, FaceBook page and pamphlet will be part of the town’s marketing program this year. But attracting talent is not something that can be addressed by a single town. We need to collaborate more as a region to address barriers that face us: attracting workforce, improving educational opportunities, lowering cost-of-living, improving broadband, building our tourism brand and empowering innovative forces to keep our employers competitive, providing good-wage jobs.

The Peterborough Economic Vitality Committee and the EDA hope to start the process. They are seeking input from businesses and citizens from Greater Peterborough towns to help guide plans for the coming years and decade. The Economic Vitality Forum will be held Thursday, February 2, from 5:30 to 8 p.m. at Reynolds Hall, across Concord Street from All Saints Episcopal Church, 51 Concord St., Peterborough. Come for supper and participate in the planning process.

Despite the challenges facing us, though, our Monadnock region has one quality in amazing bounty. It’s not just the beauty of its mountains and rivers. It is the generosity and commitment of its citizens. They self-govern, create events and venues, teach kids, feed the hungry and care for green space. What is special about this place is the people it attracts: to nurture it, feed it and to continually seed new industries as the old leave or die away.

Jeanne Dietsch chairs the Strategic Planning Committee of the Peterborough Economic Development Authority.

Sean Ryan directs the Greater Peterborough Chamber of Commerce