I, like many of you, am ready to put the economic storm of 2010 behind us and move on to sunnier skies for 2011. Whether you called it a tornado, hailstorm, hurricane, tsunami or something else, 2010 produced an economic storm like none of us had ever seen before. We emerged damaged, but not defeated. While we continue to pick up the debris and put the pieces back together, you’ll notice the skies are starting to clear. What’s the forecast hold for 2011? Let’s see…
We are rebounding from the recession now, but what lies ahead for 2011?
In a recent Mood-O-Meter survey (visit heartlandpartnership.org for details) out of nearly 100 participants, 41 percent believe the recession is over. When asked if they believed there would be a double dip to this recession, 63 percent said no. This is good news because it shows consumer confidence is rising. With that said, there is still concern that the rebound will be much slower than anticipated, and unfortunately, that has a negative effect on consumer confidence. I can tell you that we are seeing positive indicators locally and regionally for economic growth. We are seeing hiring, unemployment numbers have been declining, and people are starting to invest in the region again. We are headed in the right direction.
Are people more confident in the local vs. national economy?
National surveys report that people are more confident in their local economy than in the national economy. That seems to be the same story here in the Peoria Metro Region, too. Businesses are starting to invest again by putting capital in machinery and other equipment, a surefire sign that business owners are gaining confidence in things turning around. We have to spend our way out of a recession, and we are starting to see that happen. Unemployment is still higher than we’d like, but that trend is starting to turn, too, with several consecutive months of declining numbers.
Where will we see hiring and when?
Hiring is happening now, but it is limited. We will probably see the first big hiring wave sometime during the first quarter of 2011 and then full recovery in mid-2011. One major issue is that the jobs that were plentiful in this region in the past aren’t returning. The industries we expect to see grow are healthcare, specialized manufacturing, logistics and technology. This means people should get prepared for work in these industries. If they haven’t gone back to school or retrained (and they are waiting for things to go back to the way they were) this is going to be hard for them.
Why do we consider healthcare, specialized manufacturing, logistics and technology as our growth sectors?
We are following the trend as these industries are growing nationwide. They are beneficial to this region because they create jobs that produce a lot of wealth, and we have experience with these industries in the Peoria area.
Healthcare. We have one of the best healthcare delivery systems in the Midwest. It comes from years of high-benefit-paying companies in our region building out a top-notch healthcare infrastructure. Baby boomers are at their high healthcare-use years and this means we will have a demand for healthcare, and therefore, a fairly robust economy emerging from it.
Specialized/advanced manufacturing. The world is getting smaller and there’s a group of niches we need to identify. We are good at manufacturing and we have found new ways to do it. People are coming up with new ideas from what they already know. It is still manufacturing, but it is advanced, specialized and highly technical.
Technology. Technology isn’t just cell phones and semiconductor chips. It is also a cheaper, faster, better mousetrap. We are very good at innovation in this region, and we have a huge number of smart people in the region with great ideas. These idea guys are also drivers of technology, so it pushes us to find the newest, latest and greatest. The knowledge base and the demand together create a nice formula for success.
Transportation/logistics. These jobs are valuable to the sustainability of our community because they are non-exportable jobs and they pay living wages. Transportation/logistics is one of the first industries to come out of a recession because when rebounding begins, people start moving things. They begin replenishing their inventories and adding new materials to companies. We are good at moving things around because we have highway, water, air and rail capabilities and we are at the center of the U.S., meaning markets are very accessible throughout the country.
2010 proved that people aren’t afraid to speak out and say what they think, especially when it deals with the government. What changes are likely ahead in 2011 for our government?
The first big change people want is for the government to slow down on public policy changes. People want things to get done, but a slower pace sends a tone of certainty to the public that the issue has been thought through and the pros and cons have been weighed. This will help create confidence. Businesses and people will begin to invest again when they are more certain of what the future looks like. The second element to watch for is the call for efficiency. People are being forced to perform the same services with less revenue in everyday business, and people are demanding the same efficiency from their government. A combination of certainty or confidence, and the government becoming more efficient, will lead people to see 2011 as better than the past.
What are the buzzwords for 2011?
Transparency is a word you are going to hear a lot in 2011. People are demanding transparency on several fronts. In the business sector, people want to get information to make their own decisions instead of being told what to do. Employees want to know if the company they are working for is going to be solvent over the next few years. They want to look at the books and understand how it works. Transparency in government means people want to make sure the dollars being spent are being spent the way they were supposed to be. Whether business or government, people want to be able to foresee issues instead of being surprised by them.
We are also seeing an increased expectation of accountability. People expect you to do what you said you were going to do in the amount of time you said you would do it. In business, employees want assurance that if a mistake is made that affects the company, there will be someone held accountable. When it comes to our government, people want leaders to keep their word and do what they pledged to do. The bottom line is that people want truth and honesty, and they want someone to be responsible if things don’t happen as promised. iBi
