2008 A Look Ahead
Economy

Observing the overall patterns for 2007, Stambaugh anticipates that 2008 will follow similar tracks and is encouraged by an increase in business deposits and a steady loan volume.

Economic forecasts are just that and not predictions, said Phil Stambaugh, Senior Vice-president for Branch Administration at Nantucket Bank, pointing out that the bank's crystal ball is no clearer than anyone else's when it comes to seeing the future. Still, observing the overall patterns for 2007, Stambaugh anticipates that 2008 will follow similar tracks and is encouraged by an increase in business deposits and a steady loan volume. The exception to the loan demand is being seen in residential lending because, barring high-end activity which remains fairly level, the real estate market has slowed and is likely to rebound at a modest rate.

"We basically rise and fall with real estate," Stambaugh said of the island economy, though he noted that there are several factors that may affect 2008. One is that it is a presidential election year, and while Washington tries to maintain a sense of fiscal calm as the election approaches, many people will be wary of spending and investing until the poll results are in.

Stambaugh also cites the fact that interest rates are trending down as the nation's general economy continues to be somewhat slumped, which could have a positive effect on real estate sales. On the other hand, consumers will probably feel the pain of high gasoline prices for months to come as well as what has been estimated as potential 30 percent increases in this winter's cost for heating fuels.

Further, Wall Street executive bonuses are expected to be down this year, which could result in less money being spent on Nantucket by that population who have historically been solid investors. However, said Stambaugh, that situation may be countered by the low dollar value compared to the value of foreign currencies because people from other parts of the world may view Nantucket as a bargain spot to vacation or to buy real estate.

"Those are some of the factors that could move things forward or backward next year. Otherwise, we don't see anything dramatic. That's not very exciting, but that is the way we think it's going," said Stambaugh, who added that on a purely local basis, he believes island taxpayers are fortunate to have received the recent private philanthropy that paid for the Dreamland Theater and 10 and 12 Washington St. "That bodes well for Nantucket."

- Mary Lancaster