Lexi Coon
Stephen Craft, dean of the Stephens College of Business at the University of Montevallo, spoke at the January Shelby County Chamber of Commerce luncheon about the national and Shelby County economy.
Although this year’s community luncheon held on Jan. 30 may have been slightly different from years past after both the South Shelby Chamber of Commerce and the Greater Shelby Chamber of Commerce merged, the review of the Shelby County Business Outlook Survey remained a constant.
This was the fourth year for the survey, for which Stephen Craft, dean of the University of Montevallo’s Stephens College of Business, presented the main results.
To start, however, he first reviewed the current economic state of the nation.
Craft said the recent government shutdown, which lasted a record-setting 35 days, cost the nation about $11 billion, although some of that was back pay. Overall, he said there was a $3 billion permanent loss. Looking at the 2018 tax overhaul, Craft said it had a “tremendous” effect on the economy then, but it raised the national debt by about 4 percent.
As he was presenting, Craft said the federal deficit was at $22 trillion. He said this debt from the United States equates to about 35 percent of the global federal debt, which is comprised of debt from 195 countries recognized by the United Nations.
“No one is talking seriously about any plans to address that kind of debt,” he said. “So we’ll have to see what comes of that. But it is absolutely something that hangs over our economy.”
He also addressed one of the questions he said he gets most often: will there be another recession? He said the answer is yes, but it is hard to tell when. Trade agreements, tariffs and other factors all play a big role in the economy, and those can change over time.
Craft said, “If we can fix trade without getting sideways with our trade partners — and we’ve not had … a very decent track record with that — avoid tariffs, avoid further shutdowns and have some sort of fiscal sanity at the national level, then yes we could very potentially put off a recession for an indefinite period of time. That’s a tall order for all those things to happen.”
The national level of consumer confidence has also dropped, Craft said, which could more directly impact businesses in Shelby County. Despite that trend, he said the survey, which saw 232 respondents this year, revealed that business owners are fairly optimistic about the coming year.
Eighty-seven percent of respondents expect revenues to increase, and 70 percent expect the profits to increase.
Craft said there is good reason for the optimism in small businesses in Shelby County, as “we tend to weather business cycles very well here.”
He also noticed that the number of high-cost capital expenditures (those starting at $500,000) are expected to go down, but the smaller improvement projects ($10,000 or less) are trending upward. Reviewing employment, 52 percent of respondents think employment will increase.
The survey also looked at what affects job creation in the county. Craft said they found a few answers.
The first is difficulty finding someone with the skills and experience a job requires, which he said he has seen at every level, regardless of whether or not an individual attends college.
While potential employees may “finish high school and don’t go on to college, and apply for skilled or semi-skilled manufacturing in the state of Alabama, 80 percent of applicants fail simple drug tests,” he said.
Craft said another big factor to creating new job options is demand and growth in sales. He explained that this meant if business is doing well, it’s more likely new job opportunities will come.
He ended his presentation with one last statistic, and one that was new to this year: 90 percent of respondents believe the Shelby County economy is headed in the right direction.
“Once again for the fourth year in a row … you [business professionals and owners] have proven yourself a very optimistic bunch and we expect great things for Shelby County in the coming years,” he said.
Also during the luncheon, Joe Meads, 2018 Shelby County Chamber of Commerce chair, introduced Bill Connor as the 2019 chair.
