Phoenix may have to wait another two years to make it out of the prolonged recovery following the worst economic calamity in four generations.
The word from speakers at the SRP Economic Forecast 2015 presented by thePhoenix Business Journal is that 2016 is year of full recovery. A group of more than 700 business professionals gathered at the J.W. Marriott Phoenix Desert Ridge Resort & Spa to hear the advice.
It’s been a long, slow climb, and the light at the end of the tunnel has been seen for over a year. Many are wondering at what point the Phoenix economy hits daylight.
John Manzella, president of Manzella Trade Communications, sailed through a series of slides with messages of short-term disappointment and long-term optimism. He told the gathering the consumer confidence is lacking in the near term.
“Overall, consumer income is declining,” he said, showing a chart with national data displaying the slippage. “This is affecting consumer spending, which in turn cuts sales taxes to governments.”
“I’m going to give you a list of doom and gloom to start,” he said. “But, by the end you’ll see why I’m optimistic we’re moving in the right direction.
The lack of consumer enthusiasm is drifting into business. While job numbers are up, many businesses Manzella talked with told him they are hiring part-time workers in place of full-time, and keeping workforces under 50 full-time employees.
“It’s the way some companies are controlling costs by avoiding the Affordable Care Act’s requiring to provide health insurance,” he said.
On top of drops in consumer and business spending, governments have less money to invest. “Many people also do not understand how dependent the American economy is on a healthy European economy,” he added. “Europe is recovering more slowly than the U.S. Its growth and consumer demand are down, and they account for more than 30 percent of our exports.”
The catalysts to move the economy to the next level are years away.
“There are some impact drivers out there—(three dimensional) printing, health care advances, technological innovation—but it’s going to be a few years before they hit,” he said.
Chasing the clouds away, Manzella explained why the U.S. market system makes him optimistic.
“The U.S. population is growing through births and immigration,” he said. “Our growth is faster than most countries in Europe, and better than some countries, like Russia, where population growth is in negative numbers.”
He sees the future driven by U.S. companies strengthening exporting opportunities.
“Outside of the U.S. are 73 percent of the global purchases,” he said.
Manzella is passionate about the growth potential for domestic companies shipping both goods and services out of the U.S.
“In the developing countries live 95 percent of the world’s consumers,” he reported. “This is a sizable market for companies wanting to grow.”
In his presentation, Manzella emphasized the shortage of skilled workers.
“Eighty percent of the companies I talk to tell me that they have a critical shortage in highly skilled workers,” he related. “When it comes to just ‘skilled workers,’ 75 percent of companies tell me they have shortages.”
What this means for a market is that if education and training aren’t available to create a workforce, companies may be forced to expand elsewhere or relocate entirely. Getting a business out of the recovery tunnel into the growth daylight means seizing opportunities, Manzella said. “Investing in employee education and training is crucial. Establish customer-centric policies. Knowledge is the key to the future,” he reiterated.
Source: Phoenix Business Journal
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