Recession adds woes for struggling Pa. businesses

[June 03, 2009]  (AP)  The recession is sapping the life out of many businesses, from a big-box electronic retail chain to dozens of mom-and-pop stores. "Going out of business" signs dot suburban strip malls and Main Street storefronts alike.

The Associated Press Economic Stress Index found that no corner of Pennsylvania is immune.

The index combines three economic indicators -- unemployment, foreclosures and bankruptcy -- as a way of gauging how the recession has affected more than 3,000 counties in the United States. The higher the index's number for a county, the worse the recession's impact.

Among counties with at least a population of 25,000, Elk County had the biggest increase in the state, from 4.50 at the start of the recession in October 2007, to 14.50 in March 2009.

About 32,600 people live in the northwestern Pennsylvania county of Elk, where unemployment was a driving factor after rising about 10 points during that period to 13.8 percent. About two of every five residents there work in the battered manufacturing sector of the economy.

Two rural central Pennsylvania counties with populations of more than 45,000 -- Bedford and Huntingdon -- had the next highest increases.

Yet the floundering economy isn't solely to blame for all the troubles, especially for those businesses that had been teetering even before the recession.

In those cases, the economic downturn may have been "the absolute final straw," said Pat Craig, the owner of a small framing and gift shop in Carlisle.

Craig, who has operated small businesses for more than two decades, said a key to success is to be prepared to work nonstop for the first five years in business.

"This economy slipping out from underneath of it is the final straw, and that can be the nail in the coffin for a business that was struggling anyway," she said.

Carlisle is the county seat for Cumberland County, a county of more than 228,000 people that fared relatively well compared with other areas. The stress index has grown there from about 3.80 to 7.47 during the recession, among the lowest increases in the state.

The impact was slightly worse in neighboring Dauphin County, where the index rose from roughly 4.50 to 8.55. About 255,700 residents live in that county.

There, in Steelton, tattoo artist Angel Soto struggles with working out of his home after a run of bad luck in recent years.

Two stores, which were located in the same building, shut down after problems with the roof. Soto said the landlord wasn't keeping up with maintenance.

He met with a similar problem with a third location that closed within the last year. Soto said the property fell into disrepair before the landlord declared bankruptcy -- leaving the building condemned by the bank.

It's a humbling experience for a man who considers himself one of Steelton's top tattoo artists.

"To see my shop go from one day, OK, to the next day, it just dropped ... Yeah, excuse my French, it (angers me) whenever I pass by there," Soto said.

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[Associated Press; By GENARO C. ARMAS and CAROLYN KASTER]

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