Wells Fargo economist tells Lehigh Valley business community economic recovery could continue in 2012

'Everything I tell you is on the presumption Europe doesn’t blow up,' Economist Jay Bryson said at the Greater Lehigh Valley Chamber of Commerce luncheon.

The economic recovery will advance in 2012 assuming one thing doesn’t happen, an expert told local business people today.

“Everything I tell you is on the presumption Europe doesn’t blow up,” Wells Fargo economist Jay Bryson said. “If Europe blows up, then take what I say and ditch it.”

Bryson and local experts spoke to the Greater Lehigh Valley Chamber of Commerce’s annual economic forecast. The luncheon at ArtsQuest Center in South Bethlehem drew about 550 attendees.

Assessing both the nation and region, analysts agreed that the economy is recovering, albeit not robustly expanding. That should continue this year pending there is no global panic, Bryson said.

Bryson said events in Europe matter to local business because a collapse there would impact banks globally and raise borrowing costs worldwide, which could throw the United States back into recession.

The debt crisis in Italy is the focal point, Bryson said. Unlike Greece, which has relatively small influence, he said Italy’s $2 trillion economy is simply too big to bail out.

“If Italy blows up, it’s another Lehman Brothers,” Bryson said. “That would affect everyone in this room.”

Bryson estimated those odds at less than 50 percent, saying he expects European central bankers to provide whatever backstop needed to mitigate the crisis.

Regardless, Bryson said business owners should redouble their risk planning.

“I’m not advising people to jump into foxholes,” he said. “That would have been appropriate in 2008. It’s not appropriate now. But do your due diligence. And when you’re done, do it again. Other than that, enjoy 2012. It should be a half-decent year.”