by Dave Gardner
As winter descends upon NEPA and the region plows forward into 2020, a variety of key issues are sure to affect the regional business community, according to a lineup of watchful participants.
Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, remarked that if a person listens to the national reports, he or she would believe the next recession is right around the corner. These predictions of gloom, according to Barr, are somewhat fueled by President Trump’s brashness, his unpredictability and the instability of Washington politics.
However, Barr is not buying into any dark economic forecasts, and instead commented that a collection of new conditions for business are developing around the globe. Fortunately, history has proven that Pennsylvania in general, and northeast Pennsylvania in particular, does not experience the highs and lows inherent in great economic shifts, creating a sort of protection within the region for the business community.
He explained the energy sector is somewhat of a micro chasm for the developing economic situation as it creates conflicting signals. Energy prices are currently moderately relative to the cost of living, creating depressed levels of supplier investment but favorable product buying conditions.
“It’s hard to believe, but the country is still importing Russian natural gas despite the plentiful supply within Pennsylvania’s Marcellus shale,” said Barr. “What we need is the pipeline infrastructure to really move our gas here to market.”
Specifics for other business sectors within Barr’s economic forecast include an ongoing workforce shortage of skills fueled by changing demographics, declining numbers of youth and inadequate job applicant training. Other indicators identified by Barr for 2020 include an excellent employment rate but persistent problems with the participation rate in the workforce fueled by problems such as a lack of mass transit and quality child care.
“People that were involved in the criminal justice system and are now looking for a second chance can have a real problem with being hired,” said Barr. “I suspect our economic boom would be better if we addressed these issues.”
Select Pennsylvania commercial sectors will also continue to prosper during 2020. These include healthcare fueled by the eternally increasing numbers of seniors, and the manufacturing sector although these companies may suffer because of the trade tariffs inflicted by Washington.
Barr added that explosive levels of federal debt, which will reach almost $1 trillion for 2019 alone, must be addressed.
“Not one legislator I talk to seems to want to address this complex debt problem,” said Barr. “All they keep doing is kicking the debt can down the road.”
Calendar year 2020 looks favorable for business, provided one keeps an eye on the variables swirling about, according to Rodney Ridley, Ph.D., director of the Allan P. Kirby Center for Free Enterprise and Entrepreneurship at Wilkes University. He pointed out that, both nationally and regionally, low interest rates and high employment will remain the norm along with a healthy financial sector.
“The fundamentals look good, but this scenario could be derailed by something unknown happening,” said Dr. Ridley.
He called the new municipal leadership coming to power in both Wilkes-Barre and Scranton fascinating, and forecasts that in particular the females elected to power positions are bound to be very different than their predecessors. This new leadership, despite the problems they must confront including financial debt woes, are inheriting a local economy with healthy underpinnings that include ample development projects, industrial park expansions and a thriving educational infrastructure.
In particular, Dr. Ridley noted that new Wilkes University president Greg Cant, Ph.D., has international experience and is the correct person to take over just as the educational environment is becoming disrupted by declining population and rising costs. These variables are creating an environment where the traditional model of education must change, and Dr. Ridley therefore applauds the way Wilkes hired a business leader with educational ties.
“This selection is the opposite of how college presidents are traditionally selected, where educational experience is ranked ahead of business expertise,” said Dr. Ridley.
Dr. Ridley also forecasted that NEPA’s huge educational community must meet evolving student demands to make educational programs more marketable with the job skills produced. Increasingly, larger numbers of employers are now looking for certification in specific skills over broad degrees, and the required programs can be taught by four-year schools.
“Another thing I do worry about that could affect every one of us is the $1 trillion deficit Washington is running up now every year,” said Dr. Ridley. “This debt has grown out of control since the big tax cut, and eventually the bill for all this government borrowing will come due and perhaps be catastrophic for the economy.”
Overall optimism, plus a wish list that includes a regional small business initiative, mark the New Year’s list from Jill Murray, Ph.D., president-elect of Lackawanna College. She has concluded that a regional change is “afoot” with the election of fresh and extremely capable females to several regional leadership positions within Scranton, and is pleased these new leaders understand the need for sustainability with the decisions they make.
On the business front, Dr. Murray has noted that the millennials are becoming the largest group of consumers in economy, creating a vast number of potential customers that need to be served by business. This huge group of buyers, as a whole, are concerned about the social impact of who they do business with, and in contrast to their consumer predecessors often exhibit no brand loyalty.
“The merchants who understand these kids during 2020, and who as adults may now be inheriting large sums of money from their parents, will prosper,” said Dr. Murray. “The young consumers expect their buying experiences to be positive or they change where they buy.”
According to Dr. Murray, any analysis of the millennials as buyers must recognize that they have a different view of capitalism from their parents and do not support greedy capitalists. Their personal philosophies are not compatible with supply side economic models where every possible nickel flows up to the affluent.
“I would call the millennials wandering capitalists,” said Dr. Murray. “Catering to their corporate social consciousness is vital for a seller.”
NEPA historically produces large numbers of youth with a zero percentage of education after high school, and according to Dr. Murray this group will continue to produce challenges during 2020. The public schools, dealing with unending numbers of crisis students, do not have the counseling resources to reach many of these kids, with the scenario stoked by poverty, youth who have immigrated and social difficulties.
“The societal perception also continues that our fine tech and trade schools do not provide quality post k-12 educations, and there’s no quick fix for this, because family influences are always vital,” said Dr. Murray.