Businesspeople upbeat about local, national economies

The Springfield Business Journal's 2003 Economic Survey reflects a general optimism regarding Springfield and southwest Missouri's economy with more than 47 percent believing it better than it was a year ago. The number of positive responses climbed even higher when the national economy's state of affairs was considered: Almost 58 percent said it was better than a year ago.

In terms of economic growth for 2004, responses reflected an upward, if not more conservative, outlook. Forty-two percent of respondents expect 1 percent to 2 percent growth in the regional economy and 44 percent of respondents expect 1 percent to 2 percent growth on the national level.

A large number had even higher expectations, with 36 percent expecting 3 percent to 4 percent growth locally, and 42 percent expecting that same growth rate on the national level.

Such a positive outlook recieved a boost this December when reports on the nation's gross domestic product showed an 8.2 percent increase for the third quarter of 2003, according to the U.S. Commerce Department, which is the strongest growth rate since in 20 years. This follows a 3.3 percent increase for the second quarter.

Missouri also is faring well in its December Report on Missouri's Economic Condition, the Missouri Department of Economic Development compared the nation's loss of 220,000 jobs between January and October with the state's 18,000-job gain. Only Nebraska has a greater percentage increase in employment numbers for the period, increasing 1.66 percent compared to Missouri's .61 percent increase, said Jim Grebing, DED communications director.

The DED report, however, did reflect a lag in taxable sales. "For 10 consecutive quarters, there has been negative growth in taxable sales when adjusted for inflation and seasonal factors," the report said.

Local views

Regarding Springfield and southwest Missouri's growth rates, Jim Lahay, senior vice president with St. Louis-based stock and bond brokerage Stifel Nicholaus & Company Inc., is delighted. He said the local area should be one of the strongest economic areas in the state and exceed the growth rate nationally, possibly topping out at 6 percent to 8 percent in 2004.

Lahay attributed his estimate, in part, to fiscal teamwork among city officials and private business concerns. He also said public and private investments in Springfield, especially in center city projects, will benefit the city in the long run.

Scott Bradley, owner of Bradley's Better Beef in Ozark, is less bullish about local growth rates, but still optimistic. He said southwest Missouri should grow at a rate of 3 percent to 4 percent next year, while the national economy will churn out at least 1 percent to 2 percent. We're in an economic hot spot locally, he said.

Bradley raises and sells cattle, both wholesale and retail, on a 393-acre farm in Ozark.

A local and national growth rate of 3 percent to 4 percent seems realistic to Todd Chambers, owner of five-year-old Chambers Real Estate Services LLC. This optimism might well stem from Chamber's own 2003 experience in the commercial real estate market, where business continues to thrive for him this year, even in the traditionally slow final six weeks of the year.

"In fact, in my 10-plus years in the business, I can't remember the latter part of November and the month of December being this active, this busy," Chambers said.

Economic conditions

A low cost of living, strong educational and health care systems and a good highway network help make Springfield's economy healthy, Bradley said. The fares available from carriers operating out of Springfield-Branson Regional Airport could use some work, however, he said, lamenting the need to drive to Kansas City or Tulsa to find better pricing.

While the diversity of Springfield's business community is often cited as a central reason for its stability, Drury economics professor William Rohlf said, "This is a misplaced emphasis." Since Springfield is light on its heavy manufacturing component, a sector that tends to be cyclical with regular production downturns, this has helped the city weather the recession in the long run, he added.

Low wage rates benefiting employers, reasonable government regulations and tax rates, a general lack of local receptivity to labor unions and a hard-working population give the city an "exceptional" quality that adds to its economic evenness, Rohlf added.

Allen Kunkel, manager of regional development for the Springfield Area Chamber of Commerce, is "cautiously optimistic" about the local economy, but said the region is "doing very well" in terms of work force development with small businesses dominating. About 85 percent to 90 percent of all companies in the Springfield metro area employ 50 people or less, he added.

What to do to make it better

Lahay said he'd like to see the Missouri legislature become more aggressive with incentives offered to businesses already operating inside the state. "First of all, you've got to retain what you have. You can't throw out a bunch of incentives to get businesses in there when you've got businesses that have been there for years and, in some cases, could use that same type of support."

Chambers echoed the oft-heard mantra of lower taxes and controlled spending when it came to what the Missouri legislature could do to keep the Springfield-area economy in best shape.