My schedule has kept me on the road for the better part of the past few weeks. I first traveled to Los Angeles, then San Diego, and then on to Cape Cod (with a brief one-night stopover in New York). The bookends of the trip (LA and Cape Cod) were largely recreational. The San Diego leg was strictly business, where I attended the Annual Meeting of the Academy of International Business (AIB).

The AIB meetings were fun, as usual. I got to participate in Academy business, discuss research with colleagues, catch up with friends, and attend some parties (which, not unexpectedly, were subdued compared with years past). In LA and Cape Cod, I spent my time largely with family and friends.

Last summer, while in Cape Cod, I made the following observations (see Musings Après Vacation):

1. “For Sale” signs on homes were abundant
2. There was, uncharacteristically, little traffic on the drive between New York City and Cape Cod
3. Our usual haunts (e.g., Cooke’s, Four Seas) seemed unusually quiet

This year I’ve noticed that “For Sale” signs have stopped growing like weeds. Although there continue to be more homes for sale than I am accustomed to seeing in a usual summer, there are certainly fewer than last year. This stylized fact seems to reflect an improvement in home inventory conditions; however, I am hesitant to characterize it as such for certain, as it could simply be a reflection of a substantial “shadow inventory” of homes (see Calculated Risk for information on shadow inventory and huge shadow inventory).

One thing that I have noticed much more of this summer in and around Cape Cod is a huge increase in “For Sale” and “For Rent” signs for commercial real estate. Many buildings have been abandoned. Many are available for sale/lease. There is an incredible amount of vacancy at the local strip malls, and even at the Cape Cod Mall. This is consistent with commercial real estate as the next shoe to drop in this cycle (see Commercial Real Estate Time Bomb).

Note: I travel to LA quite frequently too, and the trends struck me as similar to those that I described for Cape Cod. I noticed fewer homes for sale on this trip than on previous (the same caveat regarding “shadow inventory” applies). Likewise, there has been a noticeable increase in signs advertising the sale/lease of commercial real estate.

Insofar as getting in and out of NYC on summer weekends (and in and out of Cape Cod), the highways seem slightly more trafficked than last summer. But again, the crowds are far from normal. Ditto for foot traffic at our local haunts. Although business seems a bit better than last year, it is way off from what I would characterize as normal, healthy summer activity.

In concluding last year’s post, I wrote:

Now I realize that the anecdotes that I’ve shared simply represent one person’s observations (an n of 1 as we like to say in the business), but if my experiences thus far this summer are any indication, I think we’re in for a long and difficult slog. I have never seen anything quite like it…

Not much has changed from last year. Economic activity continues at depressed levels. The best I can say is that we may have found a floor. The question remains: Where do we go from here??

As I have suggested in previous posts, the immediate growth engine for the U.S. economy is unclear. I see some potential in alternative energy, nano-technology, and biotech (specifically, genome mapping and its associated applications). However, I am skeptical that those industries will grow fast enough to quickly bring about robust growth. Although the U.S. economy will likely return to growth in 2010, there is a decent probability that the recovery will be a weak one.

Oh yeah, …and I’ll be back from vacation next week.

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