At the annual Economic Outlook Forum on February 25 at the Holiday Inn Fargo, nearly 600 individuals gathered to hear all about regional and global economic trends.
Craig Whitney, Chamber CEO, opened the forum by recognizing the recent loss of Office Jason Moszer, thanking our Premier Partners and event sponsors, sharing some recent news about our metro, and inviting attendees to our upcoming Investor Panel Shark Tank event. Scott Handy of Cass County Electric, the event’s presenting sponsor, also gave a brief welcome to attendees.
Dan Staller, market president at Starion Financial, took a moment to share the results of our recent FMWF Business Conditions Survey, in which Chamber member companies provided feedback about how the economy has affected their business. By comparing this year’s results to prior years, he was able to draw some conclusions about the change (and sometimes lack thereof) in local economic trends.
The results showed that:
- The top factor positively affecting performance was a domestic sales increase, which was second last year.
- The top factor negatively affecting performance was a domestic sales shortfall, which was #4 last year. Interestingly, last year’s top factor of higher operating costs, jumped down to the fourth spot this year.
- Expectations about the national economy compared to the prior year was down. Last year, 54% felt better about it; this year only 34%.
- Regional expectations compared to the prior year were even worse. 75% felt better last year; this year only 43% did.
- However, expectations about each person’s business stayed just about the same.
- For the past four years, the same issue has remained at the top for adversely impacting business: difficulty attracting and retaining qualified employees. “Seventy one percent of us are having a hard time finding employees,” Staller said. “This chart would indicate it’s not just one industry…generally speaking across the board, 50% of businesses in every industry are having a hard time.”
- On whether the FMWF infrastructure is adequate for future expansion, 55.2% said yes. “So what kind of work needs to be done to maintain our growth expectations in the region? Number one reason was expansion of affordable housing. This will continue to be an issue,” Staller said.
- 43% of Chamber members said that the drop in oil prices impacted their businesses, whether positively or negatively.
Jim Paulsen, chief investment strategist at Wells Capital Management, was next up as the keynote speaker to explain some national trends.
His comments were seemingly in line with what Staller touched on locally. “The list today of things to worry about is about as bad as it’s been since the Eurozone prices,” he said. “Fears are higher than they’ve been for the last several years.”
However, his gut feeling is that we’re not going to have a recession any time soon. “I think the increase in fears is doing some good things in the financial markets.”
“We’re struggling with the slowest-growing recovery ever is mainly because you guys got old,” Paulsen said to a chuckle from the crowd. “I think we’re going to lift productivity over the next few years, which may result in elongating this recovery into the longest one in post-war history. One of the reasons we’ve got a good shot is because it’s growing so slow, and when you have a slow-growing recovery, you don’t have excesses.”
Other reasons he cited for low risk of a recession is because we’ve returned to full employment, balance rates and current interest rate and money supply policies. The last reason? “I find that the biggest risk to the next recession is when players get overly confident. When we get confident and we’re in a big boom, we start to do really stupid things. None of that is evidenced.”
Transitioning to growth in the U.S. and abroad, he stated that he doesn’t believe that we’ll have rapid growth anywhere soon, but does think we’ll have a synchronized balance in 18 months.
Paulsen explained that there are five forces for U.S. growth:
- Credit creation
- Better household world
- Capital spending cycle still coming
- Housing starts rising another 50%
- Better growth abroad
Talking about fiscal stimulus and economic fear, Paulsen says that looking around the globe, it’s clear that this is not just a U.S. phenomena. The Eurozone volume has just collapsed, he said. This is an across the board, across the world issue.
Some other themes Paulsen discussed included China’s economy, commodity prices, income distribution, trade value of the U.S. dollar, crude oil, inflation, stocks and more. It was a highly insightful presentation, and attendees walked away learning a lot about what’s really going on around the metro and around the world, and got the pleasure to hear Paulsen’s analysis of it all. He even made economics funny and got the crowd laughing at several points.
We were happy to have local media join us for the event as well! Check out what The Forum took away from the event HERE.
Check out some of our favorite Tweets from the event!
— Starion Financial (@StarionFin) February 25, 2016
— Anne Blackhurst (@PrezBlackhurst) February 25, 2016
— Jessica Thomasson (@lssndjessica) February 25, 2016
Dr. Jim Paulsen speaks at Economic Outlook Forum. #EOF16
“We’re not going to have a recession any time real soon.”
— NDSCS (@ndscswildcats) February 25, 2016
— Dave Roeder (@the_daveroeder) February 25, 2016
— Media Productions (@mediaprofargo) February 25, 2016
— Jarrett Galbreath (@jarrgal) February 25, 2016