Execs says economy brightening; 'reshoring' will restore jobs
Union County business leaders heard good news about the economy in this year at Monroe-Union County Economic Development's 2013 Groundhog Day Economic Summit Friday morning.
Chris Platé, director of the consolidated economic development group, welcomed the crowd with high hopes for the upcoming year. He touched on the successes of 2012, like Midway Aircraft Instrument Corporation which announced plans to build a facility in Monroe. Monroe has the highest concentration of aerospace companies in the Carolinas, and perhaps further, Platé said.
"As we look to 2013, we have several projects ongoing, activities in all of our towns," he said.
Sutton Park revitalization in Monroe is ongoing. Economic development staff will begin developing work plans for each munincipality. Construction is scheduled to begin on an international terminal for Charlotte-Monroe Executive Airport. A manufacturing awareness program begins and South Piedmont Community College starts an apprenticeship program. Several towns plan to start redevelopment in their downtowns and some road improvements.
John Augustine, Fifth-Third Bank's Chief Market Strategist, presented a quick economic forecast for 2013. Mentally, most consumers are still reeling from the market collapse of 2008, but Augustine said private and public markets have grown in the last few years, the balance returns in 2011 averaging 11.2 percent.
"That's good stuff," he said.
But we are still not seeing investment portfolios bouncing back to former levels, Augustine said. The reason being that the economy is still recovering. But soon we should see economic growth again, in the stock market, the housing market and commodities.
Policy risk is low, but not absent, Augustine said. Officials avoided the fiscal cliff at the beginning of this year, but the federal government's actions will still have a huge effect on the economy, he said.
"With policy risk lower, in our view economic growth should be about a 2.5 percent this year," Augustine said.
If no unknown risks appear and disrupt growth, Augustine said 2013 could be a record-breaking year. But with growth comes higher interest rates, so he also recommended that potential investors act soon before rates rise.
Friday, the Dow closed above 14,000 for the first time in more than five years, according to the Associated Press.
Michael Randle, owner of the Alabama-based Southern Business & Development publication, told the crowd that manufacturing is not dead. In fact, soon we will hear about "reshoring", or the return of businesses that moved overseas for lower production costs in the 1990s and 2000s.
During those decades, the South lost millions of manufacturing jobs. They were replaced by service jobs, which outpaced manufacturing job creation, Randle said. But starting in 2006, trends reversed and new manufacturing jobs grew faster than service jobs. And by 2010, there was a 20-year record number of new manufacturing jobs.
Randle and his staff were amazed at manufacturing resurgence long after it seemed the South lost those jobs forever.
"We knew something was up. We didn't know what it was," he said.
Randle said he began asking the experts about this manufacturing resurgence. They replied that soon operating in China would no longer offer the savings it once did. Supply chain problems, government corruption, rising employee wages, shipping costs and poor transportation systems were unsolved problems of Chinese production. It will be less costly to manufacture items in the American South or Mexico within a few years, Randle said.
"It was a herd mentality for them to leave, it's going to be a herd mentality that brings them back," Randle said.