For months, executives, consumers and job seekers pointed to the looming war in Iraq, and then the war itself, as the source of their problems.

The term "geopolitical uncertainty" became part of the lexicon, and the war became the brush to paint a bleak economic picture, from hiring to shopping to investing.

So, now what?

With the fall of Baghdad last week, Americans exulted, hoped for a quick end to the war and talked about brighter times ahead. In reality, it may take months, maybe longer, for the national and regional economies to rebound.

Some experts say that fundamental problems - weak corporate profits, a reluctance by businesses to spend on capital improvements, lukewarm consumer confidence, directionless stock markets - leave the economy in the same precarious position as it was during the run-up to war and the 3 1/2 weeks of fighting.

"I don’t see the end of the war producing any kind of major economic turnaround, at least not in the short term," said Jordan Kaplan, a professor of managerial science at Long Island University. "The war is a convenient explanation for why the economy looks bad, but it’s not everything." Employment is the top concern. New York City lost 56,200 jobs in the 12-month period ending in February, or 1.6 percent of its employment base. That’s much worse than the nation as a whole, where 0.3 percent of all jobs vanished. Long Island’s decline was small, 2,600 jobs, or 0.2 percent, but the Island no longer can say it escaped the downturn.

Weak corporate profitability also remains a factor. Companies are beginning to issue first-quarter financial results, and Wall Street isn’t expecting much. The forecast for the companies in the Standard & Poor’s 500: an average 5.5 percent increase in profits compared with the first quarter of 2002.

The early returns last week were mildly encouraging. Of the first 34 companies to report, 24 posted better earnings than they did a year ago, and the average of all 34 was a 6.7 percent increase in profits, slightly better than expected. Analysts were quick to caution that it’s too soon to draw any conclusions.

"It is unlikely that businesses will resume hiring until there is a strong rebound in corporate profits, and we don’t see that on the horizon," said Pearl Kamer, chief economist for the Long Island Association.

When jobs are eliminated instead of created, it’s difficult for consumers to be confident enough to spend robustly. Low interest rates have helped, but only in specific parts of the economy such as homes and cars. Otherwise, retail sales have been puny, with even the usually muscular Wal-Mart reporting disappointing results.

Confidence might get a boost if gasoline prices decline during the warm-weather months, as the government predicted last week. If that happens, recovery could start as soon as this summer, according to Commerce Bank chief economist Joel Naroff. But others say it might take much longer - 12 to 18 months - before consumers and businesses fully rebound.

"If the conflict is resolved, we move back to square one, in which we focus upon what some might argue is rather tepid economic growth and lackluster business profits," said Marc Goloven, senior regional economist for J.P. Morgan Chase. "But I do think the war was one obstacle to a gathering of economic momentum, and by eliminating that at least we move to the 50-yard line."

Using Goloven’s analogy, whether the economy glides toward the end zone or is stopped short on fourth down remains to be seen. But as former President George Bush learned, voters might care less about victory in the Middle East and more about where the economy stands when the next election comes around, as it will in about 18 months.

Randi F. Marshall

Airlines Not Likely to Be Flying High

For the airlines and other elements of the travel industry, the end of hostilities is likely to mean a return to the depressed levels of business that have existed since the Sept. 11 terrorist attacks.

The war wasn’t the industry’s major problem, and the end of the fighting won’t make the troubled airlines whole again. The major U.S. carriers have lost a combined $18 billion since the attacks, mostly due to fears of flying and the slow economy.

And as the war winds down, another problem seems to be ramping up: SARS severe acute respiratory syndrome, which continues to spread, especially in Asia. It’s the wildest of wild cards for the travel industry.

"You just have to watch how this one unfolds," said airline economist Dan Kasper in the Cambridge, Mass., office of the economic consulting firm LECG.

So far, the illness’ impact has been mostly on international travel, representing one-fourth to one-fifth of U.S. carriers’ revenues. Most keenly affected is trans-Pacific flying, an important market for bankrupt United Airlines as well as for Northwest Airlines. Many companies are banning travel to Asia and several carriers have cut service because of SARS fears.

Before the war began, Kasper said, U.S. carriers were handling 12 percent to 15 percent less passenger traffic than before the Sept. 11 attacks. The war reduced that further - to 17 percent in the week that ended last Sunday, compared with the same week a year ago.

Advance bookings, especially overseas, fell by as much as 40 percent. A last-minute rush of travelers could help salvage the Easter/Passover season while the end of the war would restore interest in vacations abroad this summer.

"I think it’s quite possible that will happen," Kasper said. "That’s obviously very important because the industry needs every nickel it can get."

The industry also seems likely to get more help from the federal government, totaling more than $3 billion.

But the fundamentals including a strong economy still are missing for a complete recovery to pre- Sept. 11 levels by the Uniteds and Americans and Deltas. They face struggles to cut costs so that when a recovery does come, they share in it rather than watch the discounters like JetBlue nibble away at their lunches. - Tom Incantalupo

Shoppers Won’t Be Flocking to Malls

The war might be drawing to a close, but shoppers aren’t expected to run to stores in droves.

"Consumers are in debt and facing job insecurities, and until those are resolved any bounceback will be brief," said Frank Badillo, senior retail economist at Retail Forward, a market research firm in Columbus, Ohio. He said it might be 2004 until a sustainable recovery emerges.

Michael Niemira, vice president at Bank of Tokyo-Mitsubishi, said, "We need to see more fundamental improvement in the economy to support spending by the consumer." He expects spending to "muddle along" the next few months, even with the war over, and by summer there could be a pickup in nonautomotive buying. A drop in energy prices will help somewhat, he said.

Another reason retailers won’t be rejoicing is that consumers have become accustomed to a reduced level of spending, said Marshal Cohen, president of NPD Fashionworld, a market information company in Port Washington. They have learned "what they have now is good enough." Some people will go out to eat more frequently and buy new shoes or accessories, but not at the same pace as before the economy slumped.

"This is a lifestyle shift, not a short-term trend because of the war," Cohen said.

Food, cosmetics, kids’ apparel, accessories such as handbags and jewelry, and outdoor activity products could outperform other sectors, he said. - Elizabeth Sanger

Technology to Keep Low Profile

Technology companies, which have been rocking in a muddy rut since the dot-com meltdown of 2001, aren’t expecting much relief because of events in Iraq.

"The economic bubble and the post-bubble consequences have very little to do with the war on terrorism," said Paul Baker, a vice president of marketing at Comverse Technology Inc., a Woodbury developer of communications and voice-mail software. "People who hold the opinion that they are related are ignoring the underlying economic difficulties and stock market difficulties in the aftermath of the bubble."

Baker pointed to the stock market declines the day Baghdad fell to U.S. forces as a sign that the problems go deeper.

Computer Associates International Inc., the Islandia business software giant, expects the end of the Iraqi conflict to "begin to eliminate one of the uncertainties in the marketplace," but spokesman Dan Kaferle cautioned, "We can’t lose sight of the reasons the economy slowed in the first place, and some of those reasons still weigh on customers’ buying decisions." The bigger question, he said, is "when the overall economy will pick up, which we can’t answer."

Comverse and CA have been laying off workers over the past year (CA laid off 450 earlier this month). Kaferle said the company continues to look for "specific skill sets," but wouldn’t commit to hiring new staff.

Symbol Technologies Inc., the Holtsville bar-code scanner company, declined to comment on the impact of the conflict’s end on its business, but Scott Ciccarelli, who tracks Symbol for Gerard Klauer Mattison & Co. in Manhattan, said he doubted there would be a corresponding upturn. Symbol, too, has been steadily laying off employees for more than a year.

Of the Iraqis, Ciccarelli said, "These people need to eat before they buy bar-code scanners." - Mark Harrington

Media Optimism

An end to the war would be a definite break for the advertising and media industries, which have seen business start to get shaky.

Merrill Lynch analyst Lauren Rich Fine said advertising has been decelerating this year, though she’s sticking with her full-year forecast of a 3.7 percent increase in spending.

"We eased into the war, so advertisers had a chance to react and have decided it is OK to advertise around the war," Fine said. "The weakness being experienced in certain mediums is more related to the change in consumer confidence and spending, probably in part related to the war."

ZenithOptimedia, a media services agency that in December predicted a more conservative 1.9 percent increase in ad spending this year, bumped that figure up to 2.2 percent last week.

"The hypothesis that the ad markets were going to tank on the day that the tanks went into Iraq has turned out to be incorrect," said Rich Hamilton, chief executive of London- based ZenithOptimedia’s North American headquarters in Manhattan. "People still need to sell cars and put Yoplait in the fridge during a war."

Newspapers, which began reporting first-quarter earnings last week, may still experience some adversity. Dow Jones & Co., publisher of The Wall Street Journal, said first-quarter profits dropped 48 percent, citing a soft ad market and the war. - Monty Phan

Banking on the Banks

Leading banks are expected to cash in on postwar business, but an end to the conflict won’t usher in a turnaround for struggling brokerages.

The securities industry has been hit hard by the stock market slump of the past three years, and there appears to be little relief at hand. From December 2000 through February 2003, New York City lost 36,800 securities industry jobs, according to City Comptroller William J. Thompson. About 163,000 people are still employed in the industry meaning about one of every five Wall Street jobs has been eliminated in the past two years.

"The aggregate losses were the largest ever in terms of number of jobs," said George Monahan, director of industry studies at the Securities Industry Association. It was the highest percentage loss since the 1973-74 market downturn, he said.

A hoped-for market rally on positive war news lasted for only eight days in mid-March, and stock prices have returned to their meandering ways, adding to the gloom.

Guy Moszkowski, a brokerage analyst for Merrill Lynch, said all aspects of the business have slumped. Revenues from the highly profitable business of advising companies going public are down 70 percent from the 2000 peak. Profits have been drained from trades made on behalf of individual investors and mutual funds, while mergers and acquisitions have slowed, too.

The silver lining: Brokerages have picked up a lot of bond and derivatives trading, which probably will allow them to meet profit goals for the first quarter.

Nevertheless, Monahan said, "What we need is the retail [individual] investor back."

Large banks are expected to perform better as the war concludes. Giants such as Citigroup and J.P. Morgan Chase especially will benefit if they fund the companies that win the contracts to rebuild Iraq, said Richard X. Bove, an analyst at Hoefer & Arnett in Pinellas Park, Fla. - Pradnya Joshi and Tania Padgett

Housing Sector Stands Firm

Whether on a national level or in the hamlets of Long Island, real estate experts say the war has had little effect on the housing sector.

"In a strange way, real estate has benefited," said David Lereah, chief economist with the National Association of Realtors. "The war has kept the economy weak," so the Federal Reserve has maintained a low-interest-rate climate. Fixed mortgage rates below 6 percent have fueled home sales that are entering their fifth consecutive boom year.

Locally, Mary Adams, president of the Long Island Board of Realtors and a managing partner at Century 21 Herrick in Babylon, said she was chagrined to admit it, but the long winter had more of an impact than the war. "When it snows, people don’t go out to visit houses."

Adams said that sellers are still getting their prices but are having to wait longer than last year to find buyers.

Kenneth Malian, sales director for Douglas Elliman Tribeca Gallery in Manhattan, said business slowed during the first week of the fighting in Iraq but quickly picked up. "Things have been fine," Malian said. "We are busy." - Christian Murray