Talk of a recession is all around us - in the media, at the office, on the train. Even the kid bagging your groceries knows the economy isn't performing all that well. On Friday, the U.S. Department of Labor reported that employers slashed 80,000 jobs last month, the most in five years, as the unemployment rate jumped from 4.8 percent to 5.1 percent, the highest in two-and-a-half years - yet another sign a recession is near. Just how concerned should seafood executives be?
Very concerned. Consumer spending, which represents two-thirds of total economic activity, increased just 0.1 percent in February, the weakest showing since September 2006, according to the U.S. Department of Commerce. And the Reuters/University of Michigan consumer sentiment survey dropped to 69.5 in March, the lowest reading in 16 years, due to soaring food and energy costs and lackluster housing and labor markets.
But seafood executives aren't panicking, nor should they be, says Tim Antilla, VP and senior relationship manager at Wells Fargo in Seattle, who deals with several large seafood suppliers in the Pacific Northwest.
Seafood companies "are very professionally reviewing the situation and evaluating their strengths and weaknesses, vis-a-vis the competition," explains Antilla. "There's probably a more cautious attitude overall. Even though the economy is slowing or possibly in a recession, it hasn't developed into a full-blown recession. So you need to gauge how long and how deep this [economic downturn] may be. If it's relatively mild [like] the last two recessions, people are going to come through just fine.
"When it comes to the companies that I deal with," he adds, "there has been no credit crunch or adverse effect on companies' ability to borrow, and it's pretty much business as usual."
Washington Post columnist Robert J. Samuelson points out that even if the unemployment rate reaches 6.1 percent and the GDP (gross domestic product) falls 0.4 percent, the 2008 recession would be milder than the past two recessions in 1990-91 and 2001 and average postwar recession.
Though the word recession is being tossed around a lot, there's no reason to panic. But $14.99 fresh halibut fillets and $15.99 fresh ahi tuna steaks will be a much harder sell this year.
Editor's Note: Time's running out. SeaFood Business is collecting 2007 sales figures for the annual Top 25 North American seafood suppliers list, the Top Story of the May issue, and the deadline is this Thursday. If your company is interested in participating in the Top 25, please e-mail me at [email protected].