When compiling the results of our annual Corporate and Consultants surveys
, I noted that the economic tide appeared to be turning. Real GDP grew at an annual rate of 3.2 percent in the final quarter of 2013, and economists were projecting strong economic growth for 2014.
However, the severe cold and snowy weather of January and February now appears to be hampering that growth, particularly in manufacturing. The ISM’s overall index fell from 56.5 in December 2013 to 51.3 percent in January — still signaling expansion, but at a slower pace. “We’re still growing, but manufacturing seems to have been impacted to some degree by the very severe weather in January,
” said Bradley J. Holcomb, chair of the Institute for Supply Management’s Business Survey Committee.
December 2013 job gains hovered around 75,000 and just 113,000 jobs were added in January. If February jobs numbers are lackluster, analysts say that would dim hopes for economic momentum in 2014. Former Treasury Secretary Larry Summers and Nobel Prize winner Paul Krugman have warned that the economy is trapped by “secular stagnation” — meaning a period of weak demand and slow growth
Some fear the situation will be exacerbated as the recovering economy feels the effects of the retirement of the baby boomers. Therefore, fulfilling the need for skilled employees is at the top of companies’ priorities, a finding borne out by the results of both the Corporate and Consultants surveys. Many others who deal with manufacturers, in particular, also confirm the need for skilled labor. Stephen Gray, CEO of Gray Construction, tells us in our First Person column, “New hires will have to have some unique skills, and think about manufacturing things differently.
” He adds, “This is not Henry Ford’s assembly line.”
Interestingly, when attracting these highly skilled workers, the notion of “quality of place” comes into play — another facet of fulfilling work force needs. Matthew Tarleton and Evan Robertson of Market Street Services tell us skilled workers are at liberty to pick and choose where they want to live and work in today’s economic landscape
. A company’s “location decision is not solely about cost; it requires an all-encompassing glimpse into the prospective community,” the authors add. Of note, eight of the nine quality-of-life factors evaluated by the respondents to our Corporate Survey increased their importance ratings this year.
For a further look at all of the site selection and quality-of-life factors and more on our readers’ location and expansion plans; Stephen Gray’s interview; and “quality of place;” read the articles from the Q1 2014 issue of Area Development. To request a PDF copy of our survey reprint, e-mail email@example.com.