Slowdown impacts many area businesses

Weakness in the economy has long been evident to Robert A. Mecca, a life-planning consultant in Mount Prospect who said the economic slowdown has taken its toll on his clients.

The financial planner said his customers have been hit by greater numbers of corporate restructurings, jobs moving overseas and benefit changes.

"I've been predicting a slowdown since 2007," Mecca said.

U.S. markets opened the week Tuesday with a plunge, the Dow Jones industrial average falling 465 points -- 300 in the first minute -- then rebounding to finish down 128. Before trading began, the Federal Reserve Open Market Committee announced an emergency interest-rate cut, slashing its benchmark federal funds rate by 0.75 percentage points, to 3.5 percent, the widest cut since 1990.

"What kept us out of the last recession was low interest rates. Now people are squeezed on all sides," said Mecca, owner of Robert A. Mecca Associates LLC. He said households are being pressured by oil prices, which have been driving up inflation.

According to Paul Schermerhorn, president of office supplies retailer Park Ridge Stationers Inc. in Des Plaines, his company is seeing a slowdown among its clientele, with "smaller expenditures on large equipment and remodeling."

Even though customers are still seeking core office supply products, Schermerhorn said they are trying to find value, "passing over the gel pens" and looking instead at generic brands.

However, some local companies have yet to be affected.

Peggy Morrow runs Insight Consulting LLC, a marketing consulting firm in Hoffman Estates. She said her company has not suffered.

"I'm busier than I've ever been," she said, noting her company primarily serves small businesses.

Labor market economist Mitch Daniels at the Illinois Department of Employment Security pointed to the University of Illinois Flash Index, which despite declines has stayed above 100, indicating economic growth. The index is an inflation-adjusted weighted average of corporate earnings, spending and retail sales growth rates in Illinois.