Apr 07 2008
Debt + Pessimistic Consumer = Bad for Business
There is no surprise businesses are beginning to feel the credit-crisis pinch. Unfortunately there does not look to be any short term relief. As a consumer and business owner I am really concerned about the economy. While I don’t want to forecast more doom and gloom, I think it is time to do a financial plan tune-up. Not only for my personal finances but my business as well.
I recently read a report by Dunstan McNichol of The Star-Ledger that “NJ debt equals $3,478 per resident“.
The debt amounts to $3,478 for every man, woman and child in New Jersey — an increase of $161 from last year’s average. Only the residents of Massachusetts, Connecticut and Hawaii have a heavier per-capita state debt burden, the report shows. As recently as 1996, the state’s average debt load was less than $1,000 per resident and ranked eighth in the nation, the Moody’s report shows.
Overall, New Jersey’s state debt grew by about $1.1 billion last year, an increase of about 4.2 percent over last year’s debt total. That is slightly behind the national average rate of growth, which was 5.1 percent.
Today the APP reported that “Poll finds New Jerseyans feeling gloomy about economy”.
Forty-nine percent of respondents in the poll issued today by Fairleigh Dickinson University’s Silberman College of Business said they’re worse off financially than they were a year ago. That’s up from 41 percent in a January poll.
I really hope this passes but with the large burden of municipal and consumer debt in addition to negative consumer sentiment we all need to plan and be prepared for a short-term down turn. What are you doing to keep your business prepared?
Well written article. What we are seeing is that business have tightened their spendings and revisited their budget plans to ensure they can get through the tough time. I would prepare for the long-term and not necessarily treat this as a short-term phenomenon.