Weathering the storm
Published 9:57 pm Monday, January 11, 2010
It’s not news the 2009 economy did not recover from the dive it took in 2008. Businesses are still scared and unemployment is still high, but Suffolk hasn’t suffered as badly as many.
Local business members who have their fingers on the pulse of Suffolk’s businesses say Suffolk businesses aren’t faring as badly as some would have feared.
“According to our latest analysis, Suffolk performed better than most cities in the Hampton Roads,” said Susan Milhoan, president and CEO of the Retail Alliance.
The reasons for the success are difficult to pinpoint, but a revised approach, growth and innovation are a few main reasons for Suffolk’s stability in tumultuous times.
“It was an unprecedented time in the nation’s history, with the economic headwinds that came from the financial institutions,” said Dean McClain of the Hampton Roads Chamber of Commerce.
“The businesses doing the worst are the ones in the middle,” Milhoan said. “Discount and high-end stores are doing the best. It’s almost like you have to specialize in something and focus on that.”
According to the Retail Alliance’s third-quarter research, businesses badly hit in 2009 included electronic appliances stores, home furnishings stores, building materials and garden stores and clothing and accessories stores.
“Of the businesses hit the worst, construction probably took the brunt of the blow, and there were fewer new business start ups,” McClain said.
One important factor in Suffolk last year was the growth of northern part of the city. Harbour View is one of the largest planned communities in the commonwealth, according to McClain.
“In the last decade, there have been more new rooftops out there,” McClain said.
Where there are homes, there are businesses.
“North Suffolk is supporting suburban sprawl,” Milhoan said. “Fast food, boutiques, special interest, lifestyle support and retail businesses are all growing. The cause of the business growth is due to the effect added residential units has had.”
Milhoan also said Suffolk has done better than surrounding communities in 2009.
Another significant factor that has helped Suffolk businesses weather the economy is innovative ideas, McClain said.
“Besides getting back to basics, we need to become innovative and begin producing things,” McClain said. “Suffolk has a good start on that.”
An example he gave was Virginia Modeling, Analysis and Simulation Center, which is housed at Old Dominion University and is on the cutting edge of the modeling and simulation industry. Modeling and simulation is an emerging technology, traditionally used by government and military agencies to create and test complex hypothetical situations and their potential solutions.
By approving the CenterPoint Properties intermodal park, Suffolk also has positioned itself as a future leader in the shipping and port support industries, McClain said.
In the future, businesses will be able to ship their goods in and out of a port in Suffolk, which may also lead to more production and manufacturing in Suffolk.
“People will put manufacturing factories in close proximity to the port so they can ship overseas or across the nation,” McClain said.
Currently Target and QVC have distribution centers based in Suffolk.
“This past year, volume grew steadily at the QVC Suffolk Distribution Center,” said Audrey Ward, general manager of the QVC Suffolk Distribution Center. “It’s attributed, in large part, to our facility picking up distribution for the company’s jewelry businesses. As a result, we were able to offer our employees increased hours and overtime to meet customer demands.”
The greatest uncertainty in the next few years will be ensuring the banks and financial institutions are able to stay on their feet, business leaders say.
“The big wild card is making sure they become healthy and start healing,” McClain said. “No small or large businesses can expand or grow without the availability of capital.”
If local banks are able to weather the storm, he said, Suffolk should see better days in the near future.
“2010 is going to be a year of healing and rejuvenation,” McClain said.