Small Economies Ride High Low Labor, and Real Estate Costs Draw Investors and Spur Growth Series: Ironman Economy: The Laggards. Second of Two Parts

Article excerpt

Six years ago, Moby Dick had more life than this old whaling port.

The jobless rate was 14 percent, the area's textile mills were shutting their doors, and the fishing industry was dry docked. Local officials thought their only economic salvation was a casino.

Today, the economic tide is high. Stranded areas like New Bedford are starting to float again. The unemployment rate has shrunk to 9.2 percent for the city and 7.6 percent for the greater New Bedford metro area. The manufacturers' exodus is slowing. The fishing fleet is back hauling in cod, squid, and scallops. And the industry is using its whaling heritage instead of a casino to attract tourists to a brand new national park in its historic district. "New Bedford is roaring back," says Peter Dimond, communications director for Wareham-based Com/Electric, which issues an economic snapshot of the region. New Bedford is not alone. Around the country, regions long considered economic wastelands are reviving - some with a vengeance. Two years ago, the difference in economic growth between the top areas of the country and the laggards was five to six percentage points. Today, that spread is down to two to three percentage points. All but three of the top 100 metropolitan statistical areas are now reporting positive job growth. "The expansion is not only broad based by sector, but also broad based by region," says David Hensley, an economist with Salomon Brothers in New York. Even the District of Columbia, which has been struggling for years, has now recorded three consecutive quarters of growth. The only major exception is Hawaii, which is still losing jobs due to the downturn in the Japanese economy. One reason for the comeback of places like New Bedford is the rest of the nation's success. Corporations, looking for lower-cost real estate and labor, find such cities perfect candidates. "As companies need to expand, they are utilizing the marginal plants where {there are} laid-off workers," says Sara Johnson, an economist at DRI/McGraw Hill in Lexington, Mass. This is the case in New Bedford, where AT&T is planning to open a customer-service facility employing 1,000 workers. "They had bought the property earlier, but had changed their plans," says Jim Mathes, president of the local Chamber of Commerce. Com/Electric's most recent economic survey offers an unusually rosy picture. New home construction is up 29.6 percent in the first quarter. Commercial construction was up 47.8 percent. Electricity use jumped 6 percent. Even the beleaguered fishing industry appears to be in better shape. In the first quarter, fish prices were high. According to the city auction records, industry shipments rose by 52 percent. "The good boats have done well," says Harold Nickerson, president of the Offshore Mariners Association. …