An interesting article in today’s NY Times about the immediate effects of the credit crunch on small business. Several businessmen were interviewed but this one stood out (emphasis added):

“Michael Frome, 40, a partner in Fromeco Scale Avionics, says (sales) are way off. He and a partner lease space in a hangar in Sandy, Ore., where they and three employees build parts for remote-controlled model airplanes — not the balsa wood variety, but steel planes with wing spans up to 10 feet. Hobbyists buy them for $5,000 to $10,000 and often race them.

A month ago, Mr. Frome realized that the hobbyists, most of them men over 50 with six-figure incomes, had all but stopped buying the planes and replacement parts — including a new electronic device, developed by Fromeco, that logs flight data. Sales plummeted from a $1 million annual rate to half that level, and they are still falling.

Mr. Frome attributes the sudden drop-off to the sophistication of the hobbyists, whom he describes as conversant with Wall Street, investors themselves and shocked more than most by the current debacle.

“I think my customers are quickly reducing their discretionary spending to near zero and squirreling away money,” Mr. Frome said. “Fear and uncertainty grip them.”

There are obvious parallels between this specialized hobby and our own. It would be very interesting to know how sales of top of the line amateur radio equipment is doing at the moment.