For years, the Charlotte Chamber’s annual economic forecast luncheon has delivered the same theme: Expect another year of slow, unimpressive growth.
Some of Charlotte’s top-ranking corporate executives seemed to agree that 2015 looks better than recent years. Businesses are growing. Consumers are feeling better about spending. And uncertainty about regulation is more manageable than each previous year since 2010.
The sentiment has been evident in numerous forecasts, including our cover story in this week’s print edition, which features local economists predicting the best year so far this decade.
The chamber’s 13th annual Economic Outlook Conference was held at the Charlotte Convention Center and included a panel comprising Lacker, Bank of America CEO Brian Moynihan, Duke Energy CEO Lynn Good, Premier CEO Susan DeVore and Wells Fargo Senior Executive Vice President David Carroll. The hour-long discussion was moderated by Chris William and will be broadcast on his TV business news magazine, Carolina Business Review.
Panelists agreed consumers and businesses are in better condition than recent years. Moynihan said consumers are tracking to spend as much as 4% more this holiday season than in 2013. He also said BofA’s business customers are tapping into more credit and earning more money.
Carroll echoed the sentiment about Wells Fargo’s clientele. He characterized himself as “unambiguously positive” about the economy. He said he has been impressed that “distractions” such as ISIS, the Ebola scare and a polarized electorate haven’t undermined progress.
“There is gradual, persistent positive momentum,” Carroll said. “Our business is very good. I’m more optimistic today than I was last year.”
Lower gas prices were seen by all panelists as a positive development for consumers, especially the American middle class. “It’s real money to real people,” Moynihan said.
But the lower fuel prices are expected, short-term at least, to disrupt some foreign economies and create headaches for American oil exploration businesses.
DeVore said the health-care industry faces a mixed outlook. The sector will likely generate more new jobs than any other in the years ahead, but it is also faced with rising costs, more demand for specialized care and an aging population. She called it a “huge economic challenge.”
DeVore’s company, Premier, is a hospital-system alliance that provides supply chain, technology and other services.
In addition, the implementation of the Affordable Care Act has caused some stress as hospitals and employers adjust to new rules around insurance and standards of care.
Moynihan said BofA had been able to insure approximately 1 million people on its health plans next year without raising any costs. “This stuff works,” he said of the ACA.
Carroll said Wells Fargo has chosen to ask higher-wage earners to pay a bigger share of premiums than lower-paid workers in order to manage costs.
Lacker, the Fed economist, said smaller companies have reported more pain points with the new health-care law. He said rules about providing health insurance if companies employ more than 50 workers are frequently cited by small businesses. “It’s been a drag on growth,” he said. “It occupies the time of a lot of small businesses in our country.”
The panelists indicated large corporations are showing more willingness to invest in capital projects as access to credit and capital markets has improved greatly in recent years. And while interest rates are “very likely” to rise in 2015, the execs said that wouldn’t slow down investment.
Good, who leads Duke Energy, says rapid changes in regulations and market conditions make it difficult for large utilities to decide where to make capital investments that will play out over many decades.
“Capital markets are open, and credit is accessible,” she said. “The bigger question is where to deploy it.”
Cyber security is also expected to be a major theme in 2015. The panel agreed Sony’s recent security-breach and subsequent decision to cancel the release of the film The Interview doesn’t signal a new economic problem, but it does serve as a reminder that investments in cyber security will become more important.
“It’s not just a hobby to hack,” Good said. “It’s a business with political ramifications.”
For the first time, the annual lunch event provided a live audience for the taping of Carolina Business Review. Guests were instructed to play along with applause at the opening. But it also led to a few awkward moments as the room fell silent when production crews made adjustments. The episode will air on WTVI beginning Dec. 23.
During a microphone check at the program’s opening, moderator William asked each panelist what they were most blessed by during this holiday season. All five had the same answer: family.
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