Storm clouds in the financial forecast?

Economist Catherine Putney delivers a financial forecast during the Jan. 30 Chamber luncheon. Photo/Chris Dugan

MANCHESTER, NH — At one point during her presentation to a group of business and community leaders, Economist Catherine Putney drew nervous laughter when she spoke about a possible repeat of the Great Depression in the coming years.  “We’re on the backside of the business cycle,” she said. “There is a slow-down coming.”

Signs of the slump could be visible as soon as the first part of 2020 if not sooner, said Putney, who serves as an Economist for ITR Economics, a global economic forecasting and consulting firm located in the Queen City.  However, Putney does not feel that the slump will be as severe as 2008.

She spoke to a gathering of about 150 at a luncheon hosted by the Greater Manchester Chamber of Commerce at the Puritan Conference Center in Manchester.  During her 30-minute overview of the current and future economic environment, she hit upon several key factors.

Takeaways included:

  • While the manufacturing economy remains fairly consistent, the labor force is down due to automation
  • States like Florida and Texas are seeing in-migration and this is driving a better economy.  While not seeing people move to NH at the same rate, the Granite State is experiencing modest growth, a favorable sign
  • The auto industry might be closer to a slump than a boom due to greater inventories and rising interest rates.  On a related note, while some plants in the United States and Canada are experiencing a downturn due to higher labor costs and automation, Mexico is seeing an improved climate with plants moving to the country to take advantage of lower labor costs
  • Harbingers of a slump or slowdown from a consumer perspective, according to Putney, includes a flat growth in personal income which leads to a decrease in household spending.  Higher delinquency rates can also serve as an economic canary in a coal mine.
  • The paper industry is doomed; conversely businesses who don’t adapt as it relates to e-commerce and social media may find themselves on the outside looking in
  • The food industry will not slump, but already thin margins will become even thinner
Jeremy Linquist, CEO of Sky Peak Financial, asks a question at chamber forum. Photo/Chris Dugan

The reference to the Great Depression wasn’t made entirely in jest as Putney and other economists have been pointing to the year 2030 — literally a century after the first crash —as a bellwether of tough times.  Experts pin this primarily on baby boomers who will be aging into Medicare and Social Security and further straining a system many say will be in trouble without safety net measures. Health care costs and consumption will also rise.

With delegations from China and the U.S. meeting in Washington to discuss trade, the topic of China and trade was also broached.  “A trade war doesn’t help either side,” Putney noted. “But China will sacrifice longer and harder.”

Among many great insights from her talk, Putney says our social media habits can also influence the economy.  “The more often that people google the word ‘recession’, the more likely it is to happen,” she said.

At the end of the day, there are no “easy answers,” said Putney.  She said that sacrifices —read new taxes — would likely be the remedy to shore up Social Security and Medicare and that some models proposed would add another 30-50 years to the solvency of each program.  Chamber president Mike Skelton noted that with the NH Primary heating up this year, there will be plenty of chances to engage candidates on the issue.

The event was presented by Wipfli/Howe, Riley & Howe.  To learn more about the Greater Manchester Chamber, please visit