Charlotte’s top business leaders upbeat about 2016 economic outlook

After a year filled with change and uncertainty at several Charlotte corporations, some of the city’s top leaders voiced optimism about the local business environment and economic outlook on Friday.

At the Charlotte Chamber’s annual economic outlook conference, top bankers and CEOs from major companies said they were bullish on the coming year, citing job and wage gains, a continued housing market recovery and improvements in consumer spending.

It was a sharp contrast from the mood at the conference in recent years, when many of the same executives remained cautious about an economic recovery that struggled to gain any momentum.

“The Carolinas are doing well … and Charlotte is sharing in that prosperity,” one of the speakers, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, told reporters after the hourlong panel discussion.

“It’s a real story that hasn’t gotten the attention it deserves nationwide.”

Earlier this week, the Federal Open Market Committee voted to increase short-term interest rates for the first time since 2006. Lacker, who has a vote on that committee, and executives from Bank of America and Wells Fargo said they saw the move as a nod to the vitality of the national economy.

David Carroll, the Charlotte-based head of wealth and investment management at Wells Fargo, said he is “pretty bullish” on next year, given the job and wage growth and the desire of the business community to invest more.

“The past is over,” said Brian Moynihan, CEO of Charlotte-based Bank of America. “... We’re actually getting back to normal.”

The upbeat comments at the Charlotte Convention Center came even as financial markets suffered a rough day on Wall Street.

The Fed’s interest-rate increase buoyed markets earlier in the week, but that enthusiasm faded on Friday. The Dow Jones industrial average dropped 367.29 points, or 2.1 percent, as investors worried about slowing global growth and declining energy prices.

Carroll said the most surprising part of 2015 was the “stunning collapse in energy prices.” While lower energy prices might seem like a boon to the economy, they instead have cut into economic growth because of the impact to “peripheral industries,” such as steel, transportation and oil and natural gas production, he said.

A year of changes

Executives at the Chamber event Friday offered insights on the economy as well as their own businesses.

This year, Charlotte-based Belk sold itself to New York private equity firm Sycamore Partners, endingnearly 130 years of local ownership. During Friday’s panel discussion, CEO Tim Belk said he was “excited about this next chapter” for the department store chain.

“Our best days are ahead of us,” Belk said, adding that “stores are not going away” despite the challenge presented by the increasing popularity of online shopping and the choppiness of consumer spending, which he said should improve.

To strengthen its e-commerce capabilities, Belk said the company is working to add more employees in areas that handle tasks involving its supply chain and website.

Lacker, whose Fed district includes the Carolinas, said he doesn’t anticipate any adverse effects on the local economy from Belk’s sale.

“The Belk company is an outstanding fixture of the Southeast retail scene,” Lacker said. Charlotte has “a large labor market, so I think whatever changes come are likely to be easily absorbed.”

In other merger news, Duke Energy said in October it will acquire Charlotte-based Piedmont Natural Gas, a deal that links the nation’s largest electric utility to the resource that fuels a growing amount of its energy.

“I’m encouraged by a merger that’s off to a good start and hopefully successful,” Duke CEO Lynn Good said during the panel discussion. The deal is expected to close by the end of 2016, pending regulatory approval.

On Friday, Duke said Piedmont executive Frank Yoho will lead natural gas operations when the two companies combine next year.

Health care

Looking ahead to 2016, Susan DeVore, CEO of Premier Inc., said she anticipates “significant growth and continued implementation” of the Affordable Care Act passed in 2010, which presents opportunities for the Charlotte-based health care company.

Some had predicted that large employers would abandon their existing health care plans to move their employees into government insurance exchanges, but that hasn’t happened, DeVore said. Rather, employers seem to keeping their plans as a way to attract and retain employees, she said.

“It hasn’t really been a tragedy or a triumph that the pundits all predicted,” DeVore said.

This story was originally published December 18, 2015 at 4:24 PM with the headline "Charlotte’s top business leaders upbeat about 2016 economic outlook."