Never mind the Congressional slugfests, trade battles, fears of war and a bitterly fought election that has put Alabama in an international spotlight: None of it seems to have made much of a dent on a bubble of optimism in Mobile’s business community, to judge from a new survey.
The Mobile Area Chamber of Commerce unveiled its 2017 State of the Economy Survey results on Wednesday, and the sense of high hopes was clear among the 136 executives surveyed. Nearly 70 percent thought the U.S. economic outlook for 2018 was better or much better than this year. More than three quarters of them thought their own businesses would do better in 2018, and more than 80 percent thought Mobile’s economic outlook was better.
“Our survey shows people are even more bullish here than they were last year,” said William Sisson, chamber president and CEO. He said it was striking that people seemed to feel even better about Mobile’s forecast than the nation’s.
Factor in the number of those who thought the outlook for 2018 was about the same, at it seems that pessimists were scarce indeed. While the Chamber’s sunny summary chart didn’t actually include any negative figures, it appears that perhaps seven percent of respondents said they expect a national downturn, two percent anticipated a more challenging year for their own businesses and only 1 percent or so foresaw a decline for Mobile.
Four local industry leaders who spoke as part of a panel discussion generally didn’t let national and international uncertainly crimp their positive outlook. They did raise a few concerns, however, as did the Wells Fargo economic who delivered the event’s luncheon address.
Some key takeaways:
Despite Republican hopes, the tax reform bill being considered in Congress might not be finished by Christmas, said Wells Fargo Securities vice president and economist Michael Brown. Brown said the procedural difficulties of reconciling the House and Senate versions, among other factors, work against a quick resolution.
“Our view is yes, the tax package is likely to get done,” he said. “But we think it’s more likely a January-February sort of time frame, with the tax cuts retroactive to Jan. 1, 2018.”
Attracting and retaining qualified employees is the biggest economic issue facing Mobile’s business community, according to the Chamber survey. Secondary concerns include regulatory burdens, global market conditions and employee salary and benefit costs.
Infrastructure is an issue: Panelist Brian Harold, managing director of APM Terminals, predicted that the volume of container traffic coming through the Port of Mobile will continue to boom. But he said that a plan to enlarge the Mobile Ship Channel, and to deepen it from its current 45 feet, is critical in the long run. “We will get left behind if we stay at 45 feet,” he said. Harold also said the increased volume of shipping is putting pressure on other sectors. “The demand has never been higher for warehouse space in this area,” he said. And he said the proposed I-10 bridge “is an absolute must” to ensure Mobile’s appeal to the shipping industry.
Downtown Mobile’s revitalization isn’t tapering off – it’s on the brink of a new phase, said, John Peebles of real estate and development company NAI Mobile. Positive trends in the past include a restaurant boom, an increase in high-quality office space and a diversification of the downtown work force, he said. But the coming change is being driven by major residential developments, he said. A 24-hour population will mean more services, which in turn will help draw the “creative class” to the area. “Downtown housing is happening. It’s here,” he said.
An airport relocation, with passenger service being moved from west Mobile to Brookley, was at the very top of Peebles’ wish list. “The one thing we could do that would have the most dramatic effect, the most immediate effect, is the relocation of the airport from at the end of the Ho Chi Minh Trail and put it on I-10.” He went on to say that he sees a new willingness for the city administration and the Mobile Airport Authority to consider such a move, but said “they need to see a groundswell of support from the community.”
Education remains a concern. Jimmy Lyons, President and CEO of the SSI group, said the area’s higher-education institutions had made vast progress in the last 15 years and were turning out a good supply of qualified graduates. He said he’d seen some progress in basic education, but not enough. “That’s the one negative in my entire career that I’ve heard about Mobile, is our public education,” he said. Progress there, could be the proverbial rising tide that would lift all boats, he said.
Austal USA’s growth will pay dividends, said President Craig Perciavalle. “We’re the fifth-largest shipbuilder in the country now,” he said. “Here’s the key to that: When you’re part of the industrial base, an important part of the industrial base, Congress focuses on that. Okay, so the first priority is making sure you’re building something the customer wants … But once you become part of the industrial base, as part of our national security, that’s valuable as well. So we’ve put ourselves in a very good position going forward to build the future Navy fleet.”
Population growth is a long-term concern, said economist Brown. He said it’s reasonable to expect a short-term boom for Mobile, but if the area’s population growth continues to lag behind the national average, that “raises some questions about the sustainability” of economic growth. Even the area’s current low unemployment is due in part to a shrinking work force, he said.
According to the Chamber survey, 53 percent of respondents said they support a lottery that would help fund the state budget, and 37 percent supported a tax on specific items such as cigarettes or alcohol.
The Chamber picked Continental Motors as manufacturer of the year. Among other things, the honor was based on Continental’s decision to invest millions in a new production facility at the Mobile Aeroplex at Brookley.