Many larger industries and businesses remain strong, but smaller businesses have taken a hit from the economic problems affecting the rest of the country, according to some local small business owners.

Unemployment levels for the first part of the year have gone down since last year. In January 4.6 percent of the workforce was unemployed as compared to 5.1 percent in January of last year. February showed 4.4 percent unemployment, down from 5 percent last year.

Joel Andrews/The Lufkin Daily News (ENLARGE)

Luz Chaires stirs a pot of beans while working in the kitchen at La Unica located on North Raguet Street.

Sales have steadily increased, as well, based on the city's sales tax rebates.

"People are shopping locally and spending money in their own jurisdiction," said Jim Wehmeier, Lufkin's director of economic development. "We have low unemployment. We're continuing to develop as a regional hub for central East Texas. We provide health care and dining. Being the largest city between Tyler and Houston draws traffic into Lufkin."

Lufkin has experienced some turbulence with recent plant closings, including Armour Eckridge and the Lufkin Industries trailer division. But Wehmeier said the local economy's health made up for the closings. Armour Eckridge employees were quickly absorbed into other companies, according to Wehmeier.

"There were job fairs two months before the plant closed," he said.

Of 107 hourly jobs at Lufkin Industries' trailer division plant, 78 accepted other positions within the company, 10 were laid off, two resigned and 17 retired. Of the 28 salaried positions at the plant, 22 accepted other positions within the company, five retired and one was laid off after declining a position elsewhere.

"There's 100 still with the company," Wehmeier said. "That's good news compared to the initial announcement."

Wehmeier expects to see 300 new jobs created here within the next three to five years and 100 new jobs within the next two years. Many projects are still in the initial phases, but he listed the planned Aspen power plant as one possibility for the creation of new jobs. The plant would create approximately 50 direct jobs and more than 100 indirect jobs, Wehmeier said.

The first quarter of 2008 has proved strong and steady for some businesses and a little rocky for others.

Lufkin Industries showed growth in the oil field and power transmission divisions. Sales were down slightly the first part of the year at $147 million as compared to $148.1 million for the first quarter of 2007. But the backlog, or amount of orders put in, should keep the company busy the rest of the year. The combined backlog increased 45.2 percent to $234.7 million compared with the first quarter of last year.

"Lufkin's first quarter financial results represent a very solid beginning to 2008, as high global demand for energy drove activity in our core oil field and power transmission markets," John Glick, president and CEO of Lufkin Industries, stated in a press release.

Pilgrim's Pride had a net loss of $32.3 million compared to a net loss of $42.9 million for the first quarter of last year.

"Our results in the first quarter of fiscal 2008 reflect the significant challenge posed by higher feed-ingredient costs, which have climbed sharply over the past few months and currently show no signs of abating in 2008," Ken Pilgrim, chairman and interim president of Pilgrim's Pride, said in a press release. "Our feed ingredient costs for the quarter, on a pro forma basis, rose 24 percent, or $157 million, when compared to the same period a year ago. Those cost increases — when coupled with labor shortages, higher production, freight and fuel costs during the quarter — offset most of the improvements in market pricing and product mix."

New car sales for Al Meyer Ford and Mitsubishi on east Loop 287 were up for the first quarter of 2008. Carl Crain, general manager, said the high sales numbers were due in part to the company's new Mitsubishi franchise. Crain expects the company to follow the national automobile trend the rest of the year. He expects a downward trend until July, when he hopes sales will begin to pick up again.

"Some things are out of our control," Crain said. "We have no control over the price of fuel. Trucks and SUVs — that's what gets the hardest hit when gas gets high."

Big business has managed to hold up against the economic woes the nation has suffered. But smaller businesses have had a harder time holding out against rising food and fuel costs.

Mom's Diner had to increase its prices for the first time in two years, something its owners said they hoped to avoid.

"Everything we buy is increasing," said Larry Lawson, manager at Mom's Diner on Frank Avenue. "Flour went up about $8 from one week to the next."

Martha Quintanilla, manager at La Unica on Raguet Street, said that restaurant has struggled with higher prices for meats, vegetables and corn.

Eric Atkinson, president of Atkinson Candy Company on Frank Avenue, kept a positive attitude, despite the economic troubles.

"We're dealing with inflation the likes of which I haven't seen since the '70s," Atkinson said. "My grandfather used to say candy had a reverse function on the economy. People need a little something to brighten their day. We sell happiness and now is a good time to be selling happiness, because Lord knows there's not enough of it."