2009-08-03 Delivering a Recovery ?
After 18 months of covering this "Great Recession," one of the biggest challenges a journalist can face is finding new metrics to chart the progress of something as immense and complicated as the US economy.
Luckily Clint Binley of Fort Edward, New York returned our phone call this week. The soft-spoken, neatly bearded businessman may be the oracle of upstate New York.
Binley is the President of Pallets Incorporated, a manufacturer and distributor of wooden pallets. His grandfather founded the company in 1942, just as the U.S. military was revolutionizing the way goods were transported to meet its needs for World War Two.
The solution was a wooden platform that could be easily maneuvered by the newly invented forklift. The simple wooden pallet is now indispensible to global commerce. Binley's business also happens to be a terrific barometer of economic activity.
"When we are shipping, our customers are shipping," Binley said as he offered a tour of the mill and yard where at peak production his workers can crank out as many as 6,000 pallets a day. Those pallets make their way around the world.
"Hey, if we are doing well and shipping a lot of products, that means the economy is shipping a lot of products to their customers," he said.
Binley's business is down about 24 percent compared to last year. He actually saw the slowdown coming months before almost anyone else. Now the storage sheds on his lot are stacked to the brim with freshly cut pallets.
The aroma of the cut wood is pleasing, but the sound of the mill's saws and nail guns is deafening. The workers there gracefully juggle tasks while darting between forklifts, spinning conveyor belts and giant machines that split, bind and rip the long strands of wood into more manageable lengths and planks.
Binley has not laid off any of his workers but he has decided not to replace the ten who have left. Work hours have slow been cut from 43 hours a week to 38 hours.
"I would like to think its going to be going straight up from here but there's nothing telling me in concrete that – Hey! The worst is over..and better days are coming tomorrow," he said.
But Binley could be seeing some early signs of a recovery. Over the last 60 days Binley has noticed a increase of 3-4 percent in pallet orders. Sure, it's anecdotal evidence, but at this point in the downturn many businesses do cartwheels if they see any kind of growth.
"In manufacturing flat is the new up and that's entirely the case here," he said.
Today's new GDP report for the first quarter seems to jibe with Binley's analysis. Although the U.S. economy shrunk by 1 percent in the second quarter, it has come a long way from the 6.6 percent drop at the beginning of the year.
"It's not dead. But it's certainly not robust either," Binley observed, just before he took an urgent call from a panicked customer. The caller needed an immediate order of 300 custom pallets that Binley did not have in stock.
"I told him no problem," Binley said.
In this environment saying no to a customer is a risky proposition -- especially when the economy and thousands of pallets are stacked against you.