Bank executives are becoming more pessimistic about the economy and nearly half of respondents to a recent survey said they believe the U.S. will experience a double-dip recession, according to the survey's conductors, Grant Thornton, an audit and tax firm, and "Bank Director" magazine.

No local bank officials would speak on the record, but one executive, speaking on the condition of anonymity, said he expected the current economic environment to persist for three to five years.

"I don't feel like Newton County is out of the recession yet, and I don't think metro Atlanta is out of the recession yet. We still have high unemployment, high foreclosures. There are still 40 to 50 pages of legal ads; we're still at a record breaking pace for foreclosures," he said. "I have seen very little improvement."

Bank on it

David Oliver, communications official for the Georgia Bankers Association, said bankers can accurately gauge the economy because they have insight into businesses and consumers' finances. They can see whether businesses' profits and workforces are growing or shrinking, and how much consumers are spending.

And what the bankers association is seeing across the state is a difficult economic climate that warrants a continuation of conservative lending and the building up of capital, or money. The amount of money being loaned increased by 2.6 percent in the second quarter of 2010; however, banks continue to be hit by record levels of foreclosures, as well as business failures.

Small getting smaller

In its second quarter report, the state bankers association said high unemployment continues to stress borrowers and limit demand for high-quality new loans. That's creates problems for both banks, who are hesitant to loan, and borrowers, who are hesitant to take on unnecessary debt.

Commercial real estate agent Stan Bourne, with Prudential Colony Realty, said he hasn't seen lending standards relax at all since the recession officially ended in June 2009, according to the National Bureau of Economic Research.

"The money just seems to get tighter and tighter, especially for commercial and land and that type thing," he said.

Bourne said the only growth he's seen is either driven by the government, government-sponsored programs or very large companies, like Walgreens and Save-a-lot, both of which have announced plans to open stories in Covington. Bourne worked on the recent Social Security building that opened off the Covington ByPass Road. The federal government leases the top floor, but the bottom 16,000 square feet of space can't interest any tenants. He said anything bigger than 2,000 square feet not located in a prime commercial area won't be leased in this economy. The local bank executive agrees noting that he's seen several attorney and accountants downsize offices, even to one or two-room suites less than 800 square feet.

Regarding the tightness of credit, bankers are saying the safe, high-quality loan applications simply don't exist in large numbers.

"Banks want to make loans; that's how they make money," Oliver said. "However, those decisions are all made on a bank by bank basis, depending do economic climate, customers, their own financial standing with regulators and providing value to shareholders. Some may be lending more than others, while others may be trying to shrink loan portfolios."

Help needed, but unaffordable

In addition, the bankers association's report said job loss and other poor economic conditions continue to strain borrowers' ability to pay back loans, despite some improvement in home sales and prices in certain markets.

The Newton County bank executive said continuing fluctuation in home values has made banks continue to strictly evaluate borrower's future ability to repay and only agree to finance a portion of the purchase price. This protects banks in case a home's value drops.

However,  job loss and continuing unemployment are the larger concerns. The preliminary U.S. Dept. of Labor report for August places Newton County's unemployment rate at 12.6 percent; the rate has been in double digits since Jan. 2009.

"Personally it feels higher," said the local executive. The official rate doesn't count underemployed workers or those who have stopped looking for work. "Its going to have to get back to normal ranges (before a recover happens).

"I haven't seen anything that says (businesses are) hiring. I haven't been told by any customers that they are actively hiring back."

Bourne agrees noting that Newton County's rapid growth during the 2000s, made much of its workforce dependent on the construction industry.

"The final key is to get the construction moving and this nation moving again," he said.

Covington's new commercial building permits have actually been fairly steady this year to date with 64 permits, with construction values of $9.6 million. The permits are down from the 81 in 2009, but the values are already $4 million greater. The county continues to see almost no commercial growth with six new building commercial permits in 2010, as of September.

However, the executive said used car retailers, car repair places and lower-priced restaurants have all seen steady and even slightly increased sales.

Foggy future

Scott White, a vice president with BB&T, couldn't comment on specifics, but said he didn't feel the county was going to see a doubled-dip recession.

"There are always hills and valleys in the economy, but the economic indicators don't show double dip long-term. I do see a long slow recovery, not something quick, but not a true double dip," White said.

However, Bill Moon, an economics professor at Georgia Perimeter College, said he felt consumer and business confidence could receive a boost depending on the outcome of the November General Election.

"Two basic indicators have been stymied because people don't know what to believe, where to go, whether to invest or not, whether to spend or not," Moon said.

He said if the congressional composition remains the same, people might assume the economy will remain the same. A fresh influx of personalities could lead to a burst of spending, even as soon as spring 2011.

However, longer-term confidence might depend on a change of policy. The Georgia Bankers Association second quarter report said several federal regulations could continue to impair bank growth. In addition concerns over health care law effects and other costs are causing businesses to stand on the sideline.

Finally, business and employees may have to face the reality that the conservative spending culture is the way things should be and may not change for a long time. Resident Beth Hallman said on Facebook her family had moved to one car, moved to a smaller house and cut back on spending. Others seem to be following the trend.

"A dangerous trend in a recession is that everybody has gone ultra conservative, which is good, but that should have been the case 10 years ago," said a local resident in the investment world. "A lot of things coming down from the government seem to help people who still shouldn't own their own home."