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Stimulating Recovery: Are We Out of the Woods Yet?

Republicans blame Democrats and Democrats blame Republicans and all the while, someone is leaking to the media that the US is out of the recession. So where are we really?

By Johnny Duncan

Speaking at a White House news conference last month, President Obama stated that his "entire agenda" is focused on boosting the economy and creating jobs, but he acknowledges that the United States has been making "painfully slow" progress in recovering from the recession.

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  • In fact, if you tune into almost any news channel, we are told that the US economy is shaping up and that we are officially in the recovery mode. If this is news to you, you are not alone. We wanted to find out what people in the sign trade are experiencing so we took a not-so-scientific poll to get a snapshot of the economy and the so-called recovery movement and discovered varied opinions from sign professionals.

    While the results will vary based on location and segment of the sign industry, most sign shops and sign related businesses were close in line with how that particular region was faring in the recovery zone.

    Recovery in general
    According to a recent issue of the Los Angeles Times, most economists believe a dip back into recession - as well as broadly falling prices - will be avoided. But many have nonetheless warned that the prospects are rising, and say the more probable situation isn't much more appealing: a protracted economic depression with imperceptible growth and stubbornly high joblessness. Not too appealing, for sure.

    And, the International Monetary Fund (IMF) back in July said that the U.S. economic recovery has proved stronger than earlier expected due to massive macroeconomic stimulus, but huge public debt might drag the recovery out of track if not properly addressed.

    So as a whole, most "experts" agree that the economy is recovering, but the nooks and crannies of the US are what is important to our friends in the sign industry.

    Parts of the whole
    As far as New York is concerned, from the Great White Way to Ellis Island, tourists are flocking to New York City, firing up the city's economic engine and helping it rebound from the nation's deep recession, according to both Reuters and Moody's reports. Hotels are filling rooms, audiences for Broadway shows are growing, and the crowds at many of the most famous tourist attractions are larger than last year.

    Tourism generates about $30 billion a year for New York City, the most popular U.S. destination for international travelers. The number of visitors to the city is expected to grow about 3% this year, to 46.7 million, according to the city's office of tourism. The number of tourists dropped nearly 4% in 2009 from 2008.

    But, can tourism help boost the sales of signage products and services? For some it may, but it obviously depends on the needs of customers. Many sign businesses are finding that instead of providing sign products in advance for upcoming orders, most of the business is coming from the need for that day and at that moment.

    Rob Rosen, President of The CNC Router Store, Valley Cottage, NY, says that his business has seen a moderate recovery over the past 12 months. "A big difference in our business since the 'crash' is that our customers are buying equipment based on their immediate need. In other words, if a customer gets an order from Johnson & Johnson, they'll call and place an order for the appropriate machine as opposed to buying the equipment months in advance in hopes of getting orders."

    According to most of the US government's websites such as and the Department of Commerce, big chunks of the Midwest and South are recovering, while much of the Northeast and West are still mired in recessions that are easing in severity.

    Only 41 of 135 metropolitan areas in the Northeast and West were in recovery, according to Moody's By contrast, two-thirds of the 249 metro areas in the Midwest and South were on the upswing based on the February data, the latest available.

    Most experts agree that it could take about a year for states hurt most in the housing downturn - particularly California, Florida, Arizona and Nevada - to work through distressed housing inventory and start recovering in other business areas as well.

    Signtastic, Sebring, Fla, specializes in all kinds of signs from vinyl graphics to dimensional letters, lighted channel letters, to sign repairs and installation of flagpoles. "Unfortunately, we are down about 20% from this time last year," says Joe Berry, the owner. "I have seen a very slow recovery from the last quarter of last year which was absolutely horrible. People seem to be shopping around more than ever; also they seem to be much more price-conscious."

    According to the Bureau of Labor Statistics, Greenville, SC has a 10.3% unemployment rate with 47,000 employed providing business services, figures that some experts consider a barometer of the health of the economy for a particular region. These figures have been better. In 2000, the unemployment rate was 2.7%.

    Still, Gary Anderson, owner of Sign-A-Rama in Greenville, posted a 50% increase in sales compared to this time last year. "We've been at this location for over 15 years," says Anderson, "and from '07 until now is the worst that I've seen things." Gary noticed signs of things turning around when he began receiving more quotes than normal in August and September.

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    Small cities, which have a disproportionate share of factories, hospitals and universities, are more likely than large ones to be in growth mode. "We've been in business for just six short years and we are seeing a loss of 10%-15% in business compared to this time last year," states Gayla Schmidt of Art Attack and Sign in Priest River, Idaho, creating screenprinting products. "We knew that we were in trouble when we saw all around us the real estate business coming to a halt."

    Some parts of the US are really beginning to recover. Places like Huntsville, Ala for example. For existing sign companies and startups, Huntsville may be the place to ramp up marketing efforts. Forbes magazine just named Huntsville one of the top 10 places for business and careers. It was named America's fourth-strongest building market by BusinessWeek in September, and the nation's top midsize city to launch and grow a business by Fortune Small Business magazine.

    One of the major reasons is because of defense spending. Huntsville is home to the Army's Redstone Arsenal and NASA's Marshall Space Flight Center. The military is moving nearly 5,000 jobs there by September 2011, a shift that'll eventually generate 10,000 jobs.

    In Fort Wayne, Ind, a city of 248,000, people are spending a little more and feeling better, according to a report from General Motor's Fort Wayne Assembly facility. On May 17th, the facility started a third shift for the first time in its 24-year history.

    The state of California, one of the hardest hit during the recession because of an already almost bankrupt government, still offers opportunities for sign professionals. Though difficult in some locales, sign businesses expect an upswing when the full recovery finally hits. "We've been in business since 1994," says J.R. Zimmerman, President of Californeon Lighting, Camarillo, Ca, "and lately it feels like we are working twice as hard but getting half the business." Zimmerman gets a lot of business from the Las Vegas casinos. "When the casinos hit hard times, they cut back on the electronic signage they normally would order from us. We're hoping that when the recovery finally hits, the orders will begin rolling in"

    Every community has its story and its own level of recovery. Determining the extent of recovery for an area should not be based on what the government or the media says, but on what is actually experienced. The various segments of the sign industry are so vast that each individual niche would have to be studied and only then based on territory to determine if any real recovery exists. However, a brief scan of statistics will help to determine if an area is worth going into or if a segment is worth pursuing.

    Creating recovery
    Some lawmakers in Washington are bickering over the need for a second stimulus package. Last year's $787-billion stimulus is widely credited with preventing a far sharper downturn. But the spending programs it financed are winding down, and cash-strapped local governments nationwide have been resorting to layoffs and other cost-cutting measures. It is really up to the sign professional to take charge of creating their own recovery. What can you do to generate your own stimulus?

    First, take inventory of all expenses. Look at income versus outgo and see where cuts can be made. Don't throw out the most useful tools or layoff the most productive team members, but look for ways to trim the fat. You've done this before when the crisis first hit, but it is time to revisit the numbers.

    Next, discover ways to creatively provide for your current customer base. The actual process is for you to determine. Can you offer a service that customers are going elsewhere for? Can you provide a product that compliments your sign product or service? Is relocation to another side of town an option? Really look deep into this and brainstorm as much as possible. Bounce things off team members, your spouse, your neighbor, and even your customers.

    Finally, practice self-talk. Remind yourself that "this too will pass." Pump yourself up for sales calls, for brainstorming, and for quality production. Talk yourself into recovery. You can turn it around. You can make it happen!

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