As we turn the page (enthusiastically) on 2009, IB thought it wise to seek out the 2010 economic forecasts of local business executives and leaders. Unfortunately, only moderate consensus about a turn-around has developed here, despite more optimistic predictors such as the recent First Business Bank economic study and encouraging retail numbers from early in the holiday season.
In a year in which “flat” is the new “up,” as one of our forecasters put it, we all look forward to the day when “up” is the “same old up.” As you ring in the New Year, or the New Year rings in you, it’s worth noting that our contributors are categorized by the purely optimistic, the guardedly optimistic, and a few reasoned pessimists who are essentially shouting, “Hold on to your seats, it’s going to be a bumpy ride!”
The Pure Optimists
Donna M. Gray, president of Total Awards & Promotions, Inc./AwardsMall.com:
“Optimists say, ‘The worst is over.’ Pessimists tell us that, ‘It will be months before we really get back to normal.’ I believe that the economic pendulum is swinging back, both in Dane County and across the country. Corporate clients, from all over, are again investing in recognizing and honoring their top achievers. Appreciation is again taking a center-stage role in both companies and communities. Businesses are again recognizing the people who have been loyal and dedicated. Retention is being recognized with gifts to honor those who have ‘stayed the course.’ Human resource departments are letting people know how important their contribution is to the overall company’s growth. We’re seeing businesses recognize employees’ efforts with targeted appreciation. To a business like ours, this activity shouts ‘improvement!’”
Jim Emerick, president, Celerity Staffing Solutions:
“I see signs that we can expect a growing Dane County as well as national economy over the next year. We have absorbed a lot of hard blows in the past year, but we are a resilient people. There is still a lot of pain and still more blows to be endured from the mortgage mess, but I sense optimism in the air. Companies are starting to hire as orders are rising. It will occur with fits and starts, but as confidence builds, so will the economy. 2010 is going to be an especially exciting year for business, opportunities for rebuilding, and growth will abound.”
Steve Holzhauer, principal, Eppstein Uhen Architects:
“Stymied and cautious in 2008 and 2009, our clients have unilaterally paused to study their own business operations and inefficiencies. Every company (including ours) is doing more with less or is studying ways to be more efficient. A building or a campus is an asset that deserves to be fully utilized, not just 50 to 60 hours a week, but 24/7/365. Architects will be busy in 2010 helping building owners, municipalities, and schools optimize the use and cost of their building assets.
“Architects will help rebrand buildings in 2010, and will be asked to suggest new ways to yield better results from mechanical and electrical systems, and improve the physical health of the occupants. Companies still value their human resources and need to compete to retain the best talent. Buildings need to be efficient but also need to enrich our lives and provide a competitive advantage for those who occupy them.
“I forecast a robust 2010 for Eppstein Uhen Architects. This won’t translate into huge new construction projects, but it will be steady work for skilled trades as we create better, more efficient building solutions.”
The Cautiously Optimistic
Ayla Annac, CEO of Invivosciences, LLC:
“I want to be realistic yet optimist for uncovered opportunities in Dane County. Careful spending, sticking with budget, creative and innovative will still get the money and funds to grow. Yet, they all need to make with less and be more productive. Manufacturing will become increasingly global by 2020, with around 80% of manufacturers expected to have multi-country operations. Thus, Dane county needs to be ready or we will fall behind.
- Supply chains will also increase in complexity and consolidate. Companies need to find better and smarter distributors to reach new and target markets. Competition will be tough and will affect margins. Thus, better value products and smart products will find easier match.
- The products that offer rational and practical benefit at a value will still grow and make margins.
- Biotech will be important at many levels and needs to be encouraged, and help needs to be given for commercialization in Wisconsin.
- Dane County economic development organizations need to work harder and help small companies, more than ever, not to loose the future growth engines and job creators.
- Cooperation in every industry will be needed rather than competition. Smart strategic alliances, even with enemies, will be needed to preserve resources and grow. Win-win strategies need to be in the leaders’ agenda rather than winner takes all.
- Women and men will gain more equal foot and social and economic support system for women needs to adjust quickly in Dane County so as not to lose an important resource.
- Entrepreneurship will be where the growth will come to Dane County in addition to services and education and health care-based systems.
- Diversity will increase, so we need to know how to be diverse in each business unit and learn to manage.
- Employers will look for different type of employees, not just a pretty degree; experience, responsibility, leadership, value-added contributions, and loyalty will win the day.
- We need to cut wasteful spending, engage valued employees and keep them and keep innovating and creating better ways of serving needs. Forthcoming years will bring lots of changes, yet a new world will emerge on a stronger foundation if Dane County can prepare and encourage all leaders to work together to make that happen for our region and Wisconsin.”
Jim Blair, managing partner, Aberdean Consulting:
“I am optimistic about the coming year for both our region and nation. Our country has faced much adversity in the past, and I do not consider the current situation to be any different. The circumstances are different, but we should know by now that the more things change the more they look the same.
“I do anticipate more volatility for the future due to the continued convergence of technology and information. We will continue to see innovation; this is something our region will continue to benefit from, and in my opinion even more so in the future. I do believe we are faced with new demands placed by more volatile economic cycles which require new rule sets, or a rule set ‘reset.’ This is not our grandparents’ world any longer, and we need to rethink our conventional wisdom and practices.
“The rising costs of health care need to be dealt with; for instance our company is facing premium increases of 29% for next year and this is lower than some increases I have heard in the 36 to 46% range from other executives I have spoken with recently. While that can be intimidating, it does not mean we should not challenge conventional approaches. I believe our society, from someone in the information technology sector’s vantage point — if it were compared to software development cycle — is at a point we need a major version upgrade. To accomplish this, we need to challenge conventional approaches.
“I believe if businesses continue to engage their employees in solving their respective problems, we can make our local economy stronger. Part of the challenge is the strength to allow others to provide input into the process; that is the only way to get the best out of people. You have to appeal to the belief that everyone wants to be a part of something bigger than themselves. That is a common strength we have at our core foundation, and because of this I believe we will see growth in the New Year because leaders in the business community have been reminded in the current economic cycle to rethink their way of doing business. That message has taken hold in the last year.”
Robert Palmer, CEO of Dean Health Plan:
“2010 is likely to be a year of slow economic recovery, probably more a year of stabilizing. 2010 recovery is made more uncertain by our growing national debt, which is busy undermining the dollar’s longer-term outlook, the unknown economic impact of proposed health reform (not focused on the main core issues, therefore not sustainable), and the cost of carrying on two wars; all occurring simultaneously. But we can hope for better days!”
Tim Hausmann, president, Hausmann Insurance:
“The first-time home-buyer credit and cash-for-clunkers helped remove excess inventory in those industries, but until the unemployment, construction, manufacturing, and credit markets improve their critical financial indicators, real economic recovery has not started. That is why projects such as the redevelopment of the existing Edgewater Hotel and collateral business it will generate upon completion needs due consideration. Personally I think the project should move forward on its own merits, but the fact it has a positive affect on unemployment, construction, and manufacturing locally should push this project onto the fast track.”
The “Not So Fasts”
Joan Burke, president, First Business Trust & Investments:
“Nationally we see companies slowly growing top-line revenue and showing net income improvements. Unemployment will continue to be high and companies will be slow to reemploy, still trying to drive bottom-line income through efficiency. Federal fiscal policy will be challenged to pull back spending, while concerns over entitlement programs (Social Security & Medicare) insolvencies loom. At some point, monetary policy must turn to less free money/higher interest rates to avoid inflation and a total loss of confidence in the dollar as the world currency.
“Local, state, county, and city governments will continue to struggle with slower tax collections. Commercial development/construction may have a more difficult time in 2010 than it did in 2009, as many larger projects are coming to an end with few new large projects on the near term horizon. Housing inventories are still being worked down and should keep valuations bouncing along the bottom for some time.”
Terry Siebert, president, Dale Carnegie Training:
“With some exceptions, most of the business people that I have talked with in the past three or four months tell me that they are not nearly where they were back in early 2008. On average, sales are about 20% down from that time period. Not surprisingly, two areas that seem to be hit the hardest are construction and manufacturing. Some companies that have not laid off people in their entire history have been forced to do so in the last year. In addition, whether they are doing well or not, several folks have mentioned how much more challenging it is to get paid by their customers. Managing receivables is a different game today.
“Going forward, some of those that laid people off in the last year have been very slowly bringing people back as business gradually improves. Optimism in many cases is defined as: ‘Flat is the new up.’ As recovery starts to take place, very few are expecting to be hiring at former levels. People are being asked to do more, better and faster — all with less resources than in the good times. One client told me that his sales team is working 30% harder to get the same results level of a couple of years ago. If there is a message going forward, I tend to agree with my client. Now, more than ever, it is critical to use that combination of focus and discipline to maintain and, hopefully, grow your business as we move forward.”
Jim Hartmann, managing partner, Clifton Gunderson:
“I see the economy continuing to pick up slowly over the next six months or so with weak employment and lackluster consumer spending growth. I also have concerns about future potential for inflation, rising interest rates, and the enormous deficits and their affect on the country for years to come. There is little incentive to cut spending, so higher taxes, most likely for everyone, will be needed. Stronger economic growth, a turnaround in the jobs market, and a friendlier lending environment for businesses and individuals would be welcome. While the recession may have ended, most factors point to a sluggish recovery with many challenges ahead.”
Bob Gorsuch, chairman/CEO, Oak Bank-Fitchburg:
“The biggest problem I have in commenting on the 2010 economy is all the uncertainty that exists. With that being said, consumer confidence, in my opinion, is the key. Until that confidence begins to increase, I see little reason to feel too optimistic about 2010. I also think home prices still have some instability and need to stabilize. So I would watch the University of Michigan consumer confidence reports and realtor reports on home prices. They are the harbingers most important, again, in my opinion.”
Chris Carpenter, President/CEO, Royle Printing:
“Despite what the political machine wants us to believe, I think the general economy is in some respects worse now than it was six months ago. We’ve seen a lot of businesses pull back or sit on the sidelines. People are hesitant with commitments, both financially and strategically. Our business is cyclical, and we’re coming through what is typically our busiest period. While sales and volume were steady for the latter half of 2009, the general trend towards 2010 doesn’t demonstrate much, if any, growth. We will continue to look for ways to drive out cost in our operations while focusing on playing offense … something companies lose sight of when working their way through a very tough economic period.”
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