Examine the chart above and answer the following questions in at least 200 words.
New Hampshire’s economy appears to mimic the U.S. economy. Every time the United States falls into a recession, the total employment in New Hampshire also decreases. More times than not, when the employment drastically falls, a U.S. recession is coming. This is true in all cases except for right now. Although this could mean we just haven’t reached the U.S. recession yet, the delay between U.S. and New Hampshire recessions is normally significantly shorter than it is at the current moment. This makes me believe that there is not a recession on the horizon, at least not in New Hampshire. The second chart about building permits backs up my claim for there not being a recession. There is little to no correlation between decreasing growth of building permits and a recession. Although the rates decrease during a recession, there are plenty of instances where rates decrease and there is not a recession that follows.
Question to the businesses A regional economic cycle is not perfectly synchronized with its national counterpart, although it tends to move up and down with the national economy. In addition to the broader national economy, two other factors influence a regional economy: the national cycle of its most important industries and its internal growth cycle associated with construction swings. There are two different perspectives to consider in analyzing a regional economy: when a company sells into a distinct local market and when a company produces in a local market and sells into a national or global market.
Please, discuss how the regional economy affects your business and what you do in response.
Response from businesses
| Business | Response from Business |
|---|---|
| Graponne | We are a regional business, so we are more impacted by what is going on in northern New England. From my perspective, the ’08-’09 recession was not as bad in New England as was the ’90-’92 downturn. New Hampshire was hit much harder in the early ’90’s. Many of NH’s largest banks failed in 1992, |
| Bank of New Hampshire | Our primary operating area is NH, and to a lesser extent all of New England, so regional economic cycles are important. We monitor economic data on the state and regional level – Fed in Boston puts out excellent information – and respond accordingly, |
| Comptus | We have no direct regional sales. 50%+ of our revenue is from International sales. Almost all domestic sales are through large distributors, so we have very limited visibility to regional activity. |