Economic optimism and the bookkeepers' warning

There appears to be some better days ahead for the economy.

New home sales are surging, the Dow has posted gains over the past few days, fewer than expected claims for unemployment insurance have been filed and borrowing costs are at their lowest level since 1965.

Many economists project the Fed's aggressive action -- 11 interest rates cuts during the year -- will help bring about an economic recovery by spring.

These same economists are optimistic and feel that mild weather and low mortgage rates helped sales home sales last month. The average interest rate on a 30-year fixed rate mortgage was 6.7 percent in November, compared with 7.7 percent for the same month a year ago.

The November increase was the biggest increase in home sales since December 2000. By region, sales rose by 13.1 percent in the Midwest, 7.7 percent in the South and 6.1 percent in the Northeast.

New orders for automobiles have been strong following free financing for cars trucks to spur sales. Auto sales were up 4.5 percent in November, following an 11 percent increase in October.

That's some of the good news. But the American Institute of Professional Bookkeepers has some other ideas.

The nation's more than two million small businesses (up to 100 employees) can expect at least 12 more months of rocky economic conditions, according to a recent survey conducted by Raleigh-based Lewis & Clark Research.

Despite the predominate optimism of economists and think tanks that see an upswing in early 2002, the people who deposit checks for many small firms -- their bookkeepers -- expect business conditions to worsen.

Bookkeepers have their finger on their company's financial pulse because they're the ones who monitor the cash flow in and out every day, says Steve Sahlein, AIPB co-president. The bookkeepers agree that there may be no change in the number of days their firms will take to pay bills over the next 12 months, but 23 percent expect it to take longer to collect receivables.

Local and area businessmen have an opportunity to hear more about the economy during the Fourth Annual Economic Outlook Conference scheduled Feb. 15 on the campus of Southeast Missouri State University.

"What's Ahead for the Year 2002?" is the theme of the conference, to be held from 11 a.m. to 1 p.m. in Glenn Auditorium of Robert A. Dempster Hall.

Dr. Michael Owyang, research economist with the Federal Reserve Bank of St. Louis, will be the keynote speaker, discussing "The Economy in 2002." Dr. Bruce Domazlicky, director of the center for Economic & Business Research at the Harrison College of Business here, will give an address entitled "Why Were Forecasters So Wrong in 2001?"

More information on the conference is available by calling the Department of Economics at 651-2181 or Domazlicky at 651-2013.

Rice heading for Far East

Rice production in Missouri has increased over the past few years to more than 200,000 acres in the Southeast Missouri counties of Stoddard, Butler, New Madrid, Dunklin, Pemiscot and Ripley.

Two big happenings may result in better export markets for the state's and nation's exports:

The USA Rice Federation recently initiated a new promotional campaign for U.S. rice in the Tokyo area of Japan.

U.S. Rep. Jo Ann Emerson visited Cuba with the goal of breaking down barriers to rice exports from Southeast Missouri.

Emerson will return to Cuba again this week, and in the near future some rice may be finding its way to Cuba, along with the corn and chickens that were exported there from the United States recently.

Surveys have shown time and again that U.S.-grown rice appeals to Japanese consumers, but they have difficulty knowing where to find it. American farmers' best customer for domestic rice is Japan. Last year's sales of rice to Japan reached over $165 million.

Rice farmers have also been aggressive in opening new markets, and hopes a market to Cuba will result in an increase in rice exports, which already find their rice in Japan, China and other Asian markets.

A Cuban rice market could results millions of dollars annually.

Most of Cuba's 7.7 billion pounds of rice imports comes from Asia, but before the trade embargo against Cuba in 1962, Cuba imported the majority of its rice from the United States

Lower transportation costs would still make American rice more attractive, and Missouri is positioned to take advantage of that. Rice mills in Marston, Mo., and Stuttgart, Ark., handle a lot of Missouri's rice crops, and offer relatively close access to the Mississippi River and therefore the Gulf of Mexico.

Because of Japan's import structure for foreign rice, marketing support by USA Rice is critical to enable Japanese supermarkets to run U.S. rice promotions. USA Rice conducted a similar campaign in the Osaka area of Japan for each of the last two years with encouraging results regarding increased sales of U.S. rice. The newest promotions will let the Japanese people know what stores in Japan carry U.S. rice.

The newest rice campaign will run for 60 days.

B. Ray Owen is the business editor for the Southeast Missourian.