Last week was The Week We Avoided Economic Disaster.
At least for a few more months, anyway.
I imagine most folks in the local business community followed the 16-day government shutdown and debt ceiling debate in Washington, D.C., with the same mixture of morbid fascination and dread that I did. There’s a decent chance we’ll watch the same soap opera again, since the deal lawmakers reached keeps the government running only through Jan. 15 and extends the nation’s debt ceiling until Feb. 7.
People are still trying to figure out what the shutdown cost the country, but Standard & Poor’s estimates that it sucked $24 billion out of the U.S. economy and will reduce third-quarter gross domestic product growth from 3 percent to 2.4 percent.
Having interviewed Republican U.S. Reps. Robert Pittenger of Charlotte and Richard Hudson of Concord in recent weeks about the shutdown, I appreciate how strongly conservatives feel that the Affordable Care Act will inflict even greater damage on the country, especially small businesses.
Still, I think we can all agree that there’s got to be a way to settle disagreements that doesn’t threaten to short-circuit the entire economy and plunge us all back into recession.
I’d been thinking about all this last week when I met Scott Stone for coffee uptown. You may remember him as the unsuccessful Republican candidate for mayor in 2011 against then-Mayor Anthony Foxx.
He’s since retired from politics, he joked. He’s managing principal of American Engineering, a startup he helped launch in 2012 after years working for national firms. His firm handles everything from engineering to real estate due diligence to construction and project management – all sectors that can be sensitive to economic slowdowns.
So I was interested to get his feel for the pulse of the local economy and his thoughts on the D.C. drama.
Charlotte, he said, has proven a good environment to build his company in. As the city continues recovering from the recession, the pace of his business is gaining momentum.
“Haven’t missed a payroll yet,” he said with a chuckle.
Does the dysfunction in D.C. affect his business thinking going forward?
“I look at it as a temporary thing,” he said, “but it’s one more uncertainty to deal with.”
He sees retailers and homebuilders ramping back up. But it doesn’t feel like your usual recovery, he said, where long pent-up demand sends people running to expand their businesses and cut expansion-oriented deals. Part of that is the uncertainty, he suggested.
“It still seems like it’s hard for people to pull the trigger on things,” he said. “There’s definitely people looking at projects. It just seems to take a long time for decisions to be made.”
It does make sense. As anyone who’s ever planned a family budget knows, you don’t take on more risk when facing the unknown. And that’s what you’ve got right now when it comes to regulatory and tax policy on the national level. No long-term plan, no certainty. So people hesitate.
It’s not a helpful dynamic for the recovery of our local economy. It is nonetheless improving, but not enough to erase all worries and send new towers leaping skyward in uptown.
According to the Charlotte Chamber’s third-quarter report on new and expanded business, the area has gained nearly 11,000 jobs in the past year. More than $529 million has been invested in buildings, machines and equipment over the past nine months.
The housing and apartment markets “continue to be white-hot,” according to the report, and the widening of Interstate 485 in the southern part of the county and completion of the 485 loop in the north bode well for development opportunities.
“There are many reasons to expect this year to end strongly and for growth to continue heading into 2014,” the chamber says.
Let’s hope our friends in Washington don’t blow it.