Contrary to recent public opinion expressed by local business executives at their annual economic outlook, I expect that our economy will grow at twice the rate of the gloomy growth predicted by most commenters.
Retiring executive Dan DiMicco from Nucor says that the economy will be “hard pressed” to match the 2 percent growth in the GDP that was expected for 2012. Duke CEO Jim Rogers adds that structural unemployment will continue to be high…around 6 percent rather than the consensus of 4 percent before the Great Recession. Given the political debate around the “fiscal cliff,” it is no wonder that they are so pessimistic.
From my small business perspective, I think that 2013 will be an important year of transition and that economic growth will move upwards as we begin to face the new direction that has been set in place as the “new normal” since our Great Recession.
Here are 10 reasons for believing that our way of life will be rebounding.
1. Federal lawmakers will soon/have substantially resolved the “fiscal cliff” issues setting taxes and spending targets in place that essentially provide a platform for government and for business for the next four years. The votes come easier in 2013 because it will be a tax cut instead of a tax increase. Once these rates and packages are passed, we can all get back to business and apply them to our cost structures.
2. The mere fact that President Obama was re-elected for a second term resolves much of the political debate all by itself. He has a limited time to steer public policy before the mid-term elections and following that, our democracy will begin to sort through candidates for 2016. The second term of a President is a “lame duck” term where his political capital will wane as he gets closer to the end of his Presidency. At the same time, President Obama will be free to implement his agenda and conduct the business of the nation in his own way.
3. The Affordable Care Act will continue to be implemented. Many small business owners are concerned and even frightened by the act. At the same time, few people really understand the full impact of the act and how it will affect them. As details become clearer, more business owners will learn how they can benefit from this reform. The mere fact that small businesses with fewer than 50 employees can direct their employees to health insurance exchanges will relieve them of the annual exploration of health care costs for their employer benefit packages.
4. We are four years into an economic recovery. It is, as predicted, a slow and arduous recovery. Having lost so much manufacturing and jobs overseas, our work force is going through a huge transition to new jobs and new skills. That will continue, but more business sectors are improving. Housing, health care, technology, banking and advanced manufacturing are growing again.
5. Larger businesses and banks with substantial excess reserves will be looking to increase their returns on their assets. Their investments will likely stir even greater economic activity. In addition, American energy resources will expand and provide us greater flexibility and opportunity. We just need to grow it safely.
6. We are on the cusp of a new wave of technological growth. For the last 20 years, we have learned about computers, memory and processors carrying information for communication exchange and education. The application of that information that has and is being gathered will continue to drive costs down and advancements forward. With new avenues for growth and innovation, we will gain renewed confidence about our economic future.
7. Our engagement in the War in Afghanistan will wind down and we will withdraw troops. Our long national nightmare with terrorism will not end, but our efforts will be more targeted and focused to regions and pockets rather than countries.
8. The global marketplace will continue to evolve. We will learn more about our customers around the world and what they can contribute as well as what they will consume. At the same time, the United States will get more focused on what can be created and built inside our borders.
9. The U.S. economy and cities, in particular, will be looking at new ways to grow and learn and improve the quality of life. Our economic dominance is being challenged, but Americans are great innovators and entrepreneurs. We will design, explore and discover new avenues for growth that will be fun, fascinating and bold. That is our nature.
10. We will continue to learn how to do more with less. We will apply “green” technologies. We will find greater comfort in smaller places. We will earn more in a broad spectrum of ideas, thought, art, music and culture.
While I may be accused of being overly optimistic, I figure that we all need to look for the opportunities of the future and how we might engage them. We are smart people living in a great place with great resources. We simply need to apply our brains and mix with other people who will stimulate and challenge us to be better than we might be by ourselves. We are in a new year and we have great prospects ahead!