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Economy staggers under war's weight

Some businesses report a 40 to 50 percent drop in sales in less than two weeks. ''Nobody wants to order anything,'' one company reports.

By JENNIFER LIBERTO
© St. Petersburg Times
published March 30, 2003


If this war against Iraq goes like the last, Owen Williams figures he's got one more week of misery.

His phones have all but died, and customers have stopped coming altogether.

Planning a vacation is the last thing on the minds of Hernando County residents, who are glued to their televisions, said Williams, co-owner of West of the Moon Travel in Spring Hill.

"They'll start coming back in two weeks, just when they've had as much CNN as they can possibly have," Owen said.

Though less than 2 weeks old, the war has cast its shadow on an already dismal economic environment both in Hernando County and throughout the nation.

Many Hernando businesses said they had begun to see an upturn before the start of the war, but they now are faced with raiding their savings or finding other ways to cope. Some companies estimated sales have dropped 40 to 50 percent because residents have stopped buying everything but necessities.

"Even I would rather be home watching TV," said Wayne Suttner, who manages the Whistle Stop Station gift shop in Spring Hill, which has seen about a 40 percent drop in sales. "You just got to grin and bear it and hope this war gets over quick."

The county's travel agencies have been particularly hard hit. Nobody is purchasing tickets to travel abroad, Owens said. And some people, citing the unstable times, have even canceled domestic flights, airlines have reported.

The only type of travel that hasn't seen much of a slowdown in Hernando is cruises. However, more people are taking out insurance on their booked trips, so they can get a full refund if they decide to cancel at the last minute, said Ron Hinson, owner of Cruise One in Spring Hill.

Some local restaurants also report that fewer people are dining out in the evenings, although numbers are nowhere near as bad as they were after the terrorist attacks in September 2001.

The manufacturing industry was already headed for a downturn when the war hit. Orders to factories for big-ticket goods fell 1.2 percent nationwide in February, undoing some of a 1.9 percent gain in January, the Department of Commerce reported Wednesday. In Hernando County, several manufacturing and distribution companies reported that sales and contracts have slowed tremendously.

And for Stuart Promotional Products at the Airport Industrial Park, the war may trigger layoffs.

"Nobody wants to order anything; everybody's afraid to make a move," said Stan Walasek, the 76-year-old founder of the company. "How many times can you beat the hell out of people?"

Manzi Metals, a distribution company at the Airport Industrial Park that has contracts with the government, has also seen a slowdown, compared to last year. But owner Barbara Manzi suspects that last year, the government was stocking up, preparing for the war, and this year manufacturers are using that supply.

"I expect the contracts will come back to replenish our government's stock," Manzi said.

Gus Guadagnino, past president of the Hernando County Manufacturers Association and owner of Joni Industries, said companies need to realize that the economy has changed. He said manufacturers shouldn't expect their business to bounce back once the war is over. Manufacturers must compete with the ever-growing number of companies that have moved plants overseas, where products can be produced more cheaply, thanks largely to lower labor costs.

"Things may never go back to what it was, because it's a whole new business world," said Guadagnino, who said his own business is going through tough times.

-- Jennifer Liberto covers business and development in Hernando County and can be reached at 848-1434 or at liberto@sptimes.com .

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