This is the last installment in our four-part discussion with Helmut Pastrick, Chief Economist at Central Credit Union 1. In this installment, we ask Helmut about the possibility of a double-dip recession, and gain some words of advice on how to make it in the year ahead.
Should anyone be worried about a "double-dip" recession?
There is reason to be worried, but it's a question about how much. I wouldn't be overly worried about it at this time. I think a prudent forecast would consider that possibility, and would perhaps even have a scenario built in. I wouldn't make it the working scenario at this point, but I think one should think about it and say "what if there was a recession? What if there is the banking crisis in Europe?" It's always prudent to think about these things, and to be mentally prepared.
Overall, it's quite uncertain. I've been a forecasting economist for a number of years, and this last 3 year period since the financial crisis hit in late '08 has probably been some of the most difficult times to make accurate predictions.
Helmut Pastrick speaks at the NAIOP Vancouver November Breakfast Meeting
Do you think it's going to remain that way for the foreseeable future?
For this coming year, yes, considerable uncertainty remains. Obviously the EU situation continues to deteriorate, so I think it will get worse before it gets better. It's going to be with us for a while yet.
What should our members prepare for? Look out for?
Well you should expect some growth - it's not all doom and gloom. The metro area economy is not insular, but it does have attributes that continue to generate some growth. Maybe it's more project-specific type of growth, as opposed to significant rising-tide lifting of all boats. There will be a rising tide, but it won't be very high. Anyone who wants to hit home runs would probably have to make it project specific.
There are, and always will be, projects out there that make a lot of sense and can generate a nice return above the market - that goes without saying. Stick to your knitting, make sure you do it well, and recognize your core competencies. I don't think it's a time to be over-expansive, unless one has a unique advantage to capture market share. It's time to be somewhat cautious, not be too brazen, and always consider each project on its own merits. Taking into account the possibilities of a negative external environment, a project should make sense even if there is a recession. If there is a recession, and the project won't make sense, then you may want to think twice.
[NAIOP] members are well versed and experienced in these matters, far more than I when it comes to committing monies, investing in projects and selling projects. I'm just a number cruncher here. Your members have to actually put their money where their mouth is.
NAIOP Vancouver thanks Helmut Pastrick for taking the time to sit down and share some thoughts on the economic outlook for 2012. If you have any questions that you wish we had asked, or suggestions for future Industry Leaders to interview, please share your comments in the section below.