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Living on the economic edge - Survey finds businesses, consumers fearful of recession

The skyrocketing cost of living has Brooklyn consumers nervous, while borough businesses see an economic slowdown coming, according to a new survey released last week. The survey, conducted this winter by the Brooklyn Chamber of Commerce (BCC) and Sovereign Bank, looked at the Brooklyn economy and where it is heading in 2008. Among its findings were that 81 percent of consumer respondents rated rising oil and gas prices as the greatest threat to the economy and 56 percent ranked keeping up with the rising cost of living as their personal financial challenge. Other top personal financial challenges, in descending order, were saving for retirement (30 percent), medical expenses (28 percent) and buying a home (15 percent). While most (49 percent) consumers see their economic situation as about the same as last year, only 5 percent thought they were much better off. Conversely, 22 percent said they were slightly better off and 19 percent said they were slightly worse off. Consumers surveyed also said their major purchases in 2008 would be for home improvements and major appliances. Consumers surveyed considered the borough’s greatest strengths to be the low crime rate followed by overall quality of life, quality of health care and arts and cultural attractions. Following the high cost of living and the cost of oil/gas, consumers rated traffic congestion, overall quality of life and the quality of public education as the top challenges facing the borough. Brooklyn businesses surveyed revealed some pessimism in that 44 percent of respondents feel the economic outlook for 2008 is toward slow growth while 13 percent saw the outlook as being toward strong growth and 20 percent see no significant change in the year ahead. Borough businesses surveyed saw the top strength of Brooklyn to be economic development efforts followed by public education, institutions of higher learning, arts and cultural attractions, local political and government leadership, tourism and availability of quality labor in that order. Businesses saw the top challenges to be the rising cost of fuel followed by health care costs, neighborhoods in decay, cost of living, a high crime rate and traffic congestion in that order. On the employment front, 48 percent of the businesses surveyed say they plan a slight increase in hiring while 27 percent said they don’t plan on any significant change. Five percent of businesses said they plan a significant increase in employees while 14 percent said they expect a slight decrease and 5 percent think there will be a significant decrease in their employment plans. Forty-one percent of businesses survey said they see no change in their health care coverage while 22 percent said there will be a 22 percent increase in co-pays and only 5 percent will see an increased deductible. Nineteen percent of the businesses expect to change health care carriers. When asked to rate the most challenging business issues, 42 percent said that attracting new customers is their top challenge while 40 percent said it was obtaining credit, 33 percent said it was expanding into new markets and 28 percent said it is retaining current customers. BCC President Carl Hum said the chamber was pleased to partner with Sovereign Bank to bring members timely and relevant information. “This information is important to our membership as they sustain and help drive the Brooklyn economy,” Hum said

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