Recession swelling unemployed ranks

  Nearly a year ago, the keynote speaker for the Greater Yuma Economic Development Corp. quarterly luncheon stunned the audience with his pronouncement that the county was in a recession - one he forecast would be "long and painful."

Those words in September by economist Jim Rounds, vice president for Elliott D. Pollock and Co., proved prophetic.

With the nation now more than a year into a recession some have labeled as the worst since the Great Depression, it has indeed been a long and painful economic downturn.

Ken Rosevear, executive director of the Yuma County Chamber of Commerce, estimates that approximately 6,000 people have lost their jobs in the last year in the Yuma area. The vast majority of those job losses are related to the construction and automotive industries.

Many local contractors have cut back or closed their businesses, putting their workers into the ranks of the unemployed.

Car sales, as shown by the city of Yuma's sale tax figures, have experienced a sharp decline, with reports of layoffs on the sales lots.

Joe Fisher, owner of the local Chevrolet and Chrysler dealerships, said he's seen his new car sales fall off. "People aren't buying new cars. Contractors are buying a used pickup instead of a new one and they're running them longer."

But that's good for his service and parts departments, he said.

"We're not as busy as we were, but we're doing fine. We've made some adjustments and we're looking forward to getting back to vibrant."

Kent Rosevear, owner of Pro-Tech, which focuses largely on business fleet trucks, said he, too, is doing OK. "Work has been steady."

But he is seeing customers opting only for work to keep their vehicles on the road. "Customers aren't spending as much money. They say if it doesn't affect the performance, they're not fixing it."

The downturn in the construction and auto industries has been a double whammy, also hitting Yuma's manufacturing industry, noted Patrick Goetz, who administers a program for Yuma Private Industry Council called Rapid Response. Goetz will meet with employees who are being laid off at the work site, where he discusses budgeting and the psychological effect of being laid off, offers advice on applying for unemployment insurance and provides information on available resources.

Just two weeks ago, he visited a local manufacturer that was laying off 40 people, he said, estimating that local manufacturers have laid off more than 300 employees since July.

Along with a series of manufacturing layoffs, Goetz has been rather busy the past several months as he dealt with the closure of several retailers beginning with Linens 'N Things last summer. Then there was the round of teacher layoffs this spring.

"It was fast and furious," he said, doing two to four rapid responses a week through the winter.

He's hopeful the job losses are slowing, though, based on fewer calls he's receiving for rapid responses.

Still, the area's hospitality industry is braced for a long, hot summer.

John Mitchell closed his restaurant, John and Margie's Ranch House, until Oct. 1, saying he didn't have the resources or the sales to carry him through the summer season.

He said he's heard from the National Restaurant Association that nationwide, people are trading down in their dining choices from upscale to casual and from casual to fast food.

Bobby Brooks, owner of Brownie's, said this is the toughest he's seen in 35 years in the restaurant business. "I haven't had to lay off anyone, but I did cut back their hours. I just had to do it. It's getting tough out there."

Hotels, too, are facing a challenging summer, said Jeanine Rhea, manager of the Hampton Inn and chair of the Yuma Innkeepers Association.

She said year to date, occupancy for her hotel is down 9 percent from last year.

"It's been challenging for all of us. Some hotels are just barely making it."

According to the Arizona Office of Tourism, occupancy rates for Yuma area hotels through April was 63.1 percent, a decrease of 10.4 percent from the previous year. More startling, the April rate was 51.9 percent, down 20.2 percent.

One factor is the addition of nearly a thousand rooms with the opening of several new hotels in the last several months.

But the economic downturn is also having an impact, said Rhea. There are significantly fewer leisure travelers on the weekends. And her hotels are seeing fewer visits or shorter stays by its regular business travelers, such as contractors at Yuma Proving Ground.

That has a ripple effect through the local economy, Rhea said. "That affects our suppliers as well. It definitely affects a lot of people when the hotels aren't busy."

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Businesses that have closed in the past year:

Linens 'N Things
Mervyns
Shoe Pavilion
Circuit City
Crescent Jewelers
Ann Taylor Loft
Fashion Bug
Food City in San Luis, Ariz.
Zales Jewelers in Southgate Mall
Blockbuster at the Crescent Center
Foxworth-Galbraith Yuma store
LA-Yuma Freight
Spherion Call Center
DHL (a package delivery service)
Harris Tours
Chaparral Travel
Kirstin's
Fortune Cookie  Restaurant
Galaxi Auto
Two Rivers Auto
Java Oasis
Time 'N Tune
Nestle Tollhouse Cafe by Chip
The Natural Foot
Azuelo
Marva Jane's Ceramics
McDonalds' Discount Carpet
Chicken on the Run
5 Star Video in Yuma
Del Taco at 4th Avenue and 20th Street

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Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.