Come Sept. 18, Springfield-area businesspeople will have a chance to hear three national speakers’ perspectives regarding what’s on the economic horizon as the Springfield Business Development Corp. presents the Ninth Annual Economic Outlook Conference. “This conference is really focused on two things. One is emerging economic trends that are really impacting the rest of the country,” said Ryan Mooney, leader of the SBDC, a wholly owned subsidiary of the Springfield Area Chamber of Commerce. “Then, we bring in national speakers ... and ask them to boil it down to the local level. What do we need to be considering as a community to really position our region to be ahead of the curve?”
Economist Sean Snaith, Ph.D., director of the University of Central Florida’s Institute for Economic Competitiveness, is the conference’s scheduled keynote speaker.
“I think my main theme will be about uncertainty in the economy and how, despite the fact that we’re in the fourth year now of this national economic recovery, it still doesn’t feel that way,” Snaith said.
Mooney, who also is senior vice president of economic development with the Springfield chamber, said other speakers will focus on two issues that are central to economic development for any community: education infrastructure, specifically in relation to workforce development, and transportation infrastructure.
The other speakers are Brian Kelsey, founder of Austin, Texas-based consulting firm Civic Analytics, and Janet Kavinoky, executive director of transportation infrastructure at the U.S. Chamber of Commerce.
Mooney said Kelsey would bring an analytical perspective to the connection between education and creating a productive workforce, while Kavinoky will address the importance of ongoing investment in the full spectrum of transportation infrastructure.
“Not only are we talking about highways and roads and bridges and the ability to deal with new growth, but we’re also talking about transit. We’re talking about air and rail, and some of these other aspects that are important for a transportation system,” Mooney said. “One of the messages that (Kavinoky) has carried in some of her previous speeches is that you have to continue to reinvest in that ... or it’s going to become more of a liability than an asset.” An uncertain world
Keynote speaker Snaith said economic uncertainty is more extensive in the current environment, which is hampering overarching national recovery.
“In an uncertain world, a turtle pulls its head back into its shell. An armadillo curls up into a ball. And I think businesses, faced with this uncertainty, stay put. They don’t push forward with new projects, and they don’t rush out and hire unless they absolutely have to. So I think that’s what’s really got us stuck in place, and why the recovery has been decelerating,” Snaith said, adding that domestic politics and policy have created a cloud of uncertainty for the private sector.
Perhaps front-and-center on the uncertainty front is the November presidential election, Snaith said, particularly given that the candidates represent very different paths for the country, especially as it relates to health care policy.
“Obviously, the president will continue forward with health care reform, and Romney has said he’s going to repeal it, so that’s a huge difference in terms of businesses and hiring and what costs might be going forward when businesses decide to hire additional employees,” he added.
Other policy changes, Snaith said, relate to what Federal Reserve Chairman Ben Bernanke has identified as an approaching fiscal cliff.
“That is a catch-all term for the expiration of the Bush tax cuts and the payroll tax cuts that are set to happen at the end of 2012, as well as across-the-board spending cuts that are supposed to begin in 2013 that were triggered by the Debt Reduction Supercommittee’s failure to come to agreement on a path forward,” Snaith said. “We’ve got that potential significant negative shock on the horizon, and ... it’s unlikely that anything is going to happen until after the election on that front.”
In a survey released in August by the National Federation of Independent Business, uncertainty about economic conditions and uncertainty regarding government actions ranked No. 2 and No. 4, respectively on the list of the Top 10 concerns for small employers. The top concern was the cost of health insurance, and other factors on the list included fuel costs and tax issues, according to NFIB.com
There also are global uncertainties, Snaith said, pointing to the European sovereign debt crisis, which affects financial markets as well as trade between the European Union and the U.S. Causes for optimism
While Snaith said national reluctance to hire and expand is the result of an environment that’s unusually uncertain, he said some uncertainties will be mitigated by the end of the year or early in 2013.
“We’ll know the outcome of the election. We’ll know what’s been done to address the fiscal cliff,” Snaith said. “We’ll know which road we took at that fork, and businesses will be able to move forward knowing a little more about what the next four years is going to hold.”
In the meantime, he acknowledges that there have been some bright spots, including increased automotive sales, for national economic recovery.
The SBDC’s Mooney notes that locally, too, there are indications that brighter days are coming for the regional economy, though like Snaith, he’s seen evidence that uncertainty brings angst – and sometimes, hesitation – when companies are considering expansion.
On a grand scale, Mooney said, unemployment is slowly decreasing – it was at 6.7 percent for the Springfield metropolitan statistical area as of July, the latest month for which data is available – and manufacturing jobs seem to be picking up.
He cited the approval last month by Springfield City Council for incentives that support $49 million in improvements to Kraft Foods’ east Springfield plant as another indicator of what lies ahead for the local economy.
“The massive investment that Kraft is going to be making in our community is just another affirmation of what this economy has to offer to companies and what the productivity can bring,” Mooney said.
Also encouraging, Mooney said, are the nine projects SBDC has announced so far this year, compared to 12 in all of 2011, and an uptick in site visits – nine year-to-date versus a total of four in 2011.
“Even if we don’t end up winning the deal, we find that we’ve got a better chance of that if we can get them into Springfield, let them see what’s going on and let them see the level of economic activity and community activity that’s occurring,” Mooney said, noting that visits have been from companies in manufacturing, back-office and technology.
On the technology front, Springfield information technology firm JMark Business Solutions Inc. has launched plans to expand its headquarters and create 42 jobs in three years, with a capital investment of $564,000. While the added jobs are welcome news, Mooney said expansions in the IT sector point to an ongoing local challenge: making sure the local labor pool is appropriately equipped to fill jobs as they come on line.
“IT unemployment nationally is between 1 [percent] and 2 percent, so it’s very tough,” Mooney said. “That’s what we hear from folks inside that industry, so we’re trying to do what we can as workforce development entity and as a community, to make sure we’re able ... to help companies that need to grow.”[[In-content Ad]]