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An annual economic outlook survey shows half of the local people surveyed worse off financially than they were a year ago.

Nonetheless, Lycoming Countians have good reason to be optimistic about the future, state Sen. E. Eugene Yaw, R-Loyalsock, told local business and political leaders Wednesday during a breakfast at the Holiday Inn.

The source of that optimism, Yaw said, may be summed up in two words: Marcellus Shale.

Experts believe 363 billion cubic feet of recoverable natural gas is trapped in the shale, and Lycoming County is sitting right on top of it, Yaw said.

"If I told you we were sitting on top of the largest natural gas deposit in the world, we'd be jumping up and down. And we are jumping up and down," he said.

According to Yaw, Lycoming County is poised to be a leader in the development of natural gas. That will, in turn, insulate the area from economic problems facing other parts of the nation, he suggested.

"I think this area is going to buck any trend in this nation," he said.

"We are in really great shape in this area," Yaw said. "We are important to the economy of Pennsylvania and important to the economy of this country."

Yaw made those remarks during the annual economic outlook breakfast of the Williamsport-Lycoming Chamber of Commerce, which also included the results of Sovereign Bank's annual economic outlook survey.

Joining Yaw on the panel were Vincent J. Matteo, chamber president; state Rep. Rick Mirabito, D-Williamsport; and county planning department executive director Kurt Hausammann Jr.

Mirabito said he shares Yaw's optimism about the local economy, not only because of natural gas development, but because of business investment unrelated to gas exploration.

But that's not all that's going on locally to move along the economy. Hausammann reviewed several county initiatives designed to spur economic development.

Among them is the Brownfields Assessment Program, which identifies and assesses underused or abandoned industrial sites that could be redeveloped.

Matteo called for a concerted effort in attacking the area's economic problems and condemned as defeatist the "us against them" mentality that some government leaders have.

The survey says ...

As for Sovereign's survey, it shows local consumers and business owners to be not so optimistic.

The bank surveyed 750 consumers and 150 businesses in November and December, according to Lawrence F. Delp, the bank's executive vice president of commercial banking.

The survey found that local residents view the area's quality of life, low crime rate and cost of living as strengths, but they are concerned about employment opportunities and the cost of energy.

The increase in unemployment, rising energy costs, the cost of the financial bailout and stock market volatility were seen as threats to the nation's economy.

The survey revealed a jump in people who believe their financial situation is getting worse. In 2008, 50 percent of local residents surveyed saw their personal financial situation getting somewhat or much worse, compared to only 31 percent who felt that way the previous year.

More than half of those surveyed said they are driving less or changing their driving habits. Nearly half said they dine out less or have changed their eating habits. More than 40 percent said they save less, while almost 30 percent said they use money from savings to make ends meet and others are cutting the amount they contribute to their retirement plans.

From the perspective of business owners, the quality of life, cost of living and good colleges were among the area's strengths, while attracting and retaining young skilled workers, taxes and the cost of health care were top challenges.

About 20 percent of companies surveyed said they plan to hire more employees in 2009, down from 44 percent last year. Despite the economy, business owners expect the number of jobs in the area to remain stable in 2009, according to the survey.

Delp said because of more recent economic development, survey results may be skewed.

He added that while many are pessimistic about the area's economic future, "it's going to change at some point in time."

Delp used a lesson from history to prove his point.

In 1981, the prime lending rate was 20.5 percent, inflation was 14.8 percent, unemployment was 10.8 percent and a 30-year mortgage - if you could get one - was 18.5 percent.

"We recovered from that," Delp said. "For those of us who were doing business those days, it wasn't fun. So there is hope."