Don't expect much more in 2013, business experts say
If you're hoping for the economic boom to start in 2013, you'll be disappointed, according to a panel of business experts at the Daily Herald Business Ledger Newsmakers Forum: Business Outlook 2013 Thursday in Rolling Meadows.
More than 120 local executives and entrepreneurs packed the Meridian Banquet and Conference Center to hear what's in store for suburban business in the coming year. While two of the three panelists — Illinois Chamber of Commerce President and CEO Doug Whitley and First American Bank First Vice President Elizabeth Pierson — said the slow economic growth that occurred in 2012 will continue next year despite numerous challenges, panelist Kurt Anderson, CPA, principal-in-charge of the Tax Group at Corbett, Duncan & Hubly in Itasca, was not as optimistic for the coming year.
"We're in a plow horse economy," Pierson said. "It's making slow and guarded advances, but it's still moving."
She noted that as interest rates continue to stay at record low levels, the incentive remains for business to buy capital and refinance debt, allowing it to focus on growth.
"If a business is comfortable with its business plan and wants to spend, the money is there," Pierson said. "You just need to be able to repay it."
Whitley focused on the state's political scene, noting the next two years in Springfield will be critical for the state's business climate. With Democrats controlling the state legislature and the Republican party regrouping after November's election, the onus will be on the controlling party to show it can be responsible in responding to the issues that are crippling Illinois businesses, he said.
"The question is will (Democrats) be responsible with the responsibility they've achieved?" Whitley said.
He said some key Democratic leaders, such as Chicago Mayor Rahm Emanuel, Cook County Board President Toni Preckwinkle and Gov. Pat Quinn have shown they can work with the business community to make improvements, but more needs to be done to solve pressing issues ranging from the state pension crisis to improving infrastructure and restoring fiscal integrity.
"We've been making incremental changes for years when we need to be making bold changes," he said.
Whitley did note that slow growth has occurred during the past year in a number of industries, particularly construction, financial and manufacturing.
That was tempered by Anderson, who compared the coming year to the movies "A Perfect Storm" and "Halloween."
"In 'A Perfect Storm,' we have increases coming in all directions, and in 'Halloween,' we have taxes we thought were dead coming back to life," Anderson said.
He noted the impasse in Congress over the impending "fiscal cliff" will likely mean the elimination of the Bush tax cuts, resulting in tax increases for some businesses and individuals during the next year.
Anderson estimated that overall, increases on the federal level could add 5 to 8 percent to a business' tax burden — and that does not include what could come from state, county and local governments, all of whom are also looking for additional funding.
He said one client has seen a dramatic decrease in sales related to the trucking industry and said it could point to "a mini Midwest recession" in that industry next year.
"And if the trucking industry is the canary in a coal mine, there's going to be a problem come 2013," Anderson said. "Particularly if the taxes we're discussing in the fiscal cliff come along, they're going to see a significant hit. 2012 was not a banner year for anybody, and they're not looking for a dramatic change in 2013."
Corbett, Duncan & Hubly and First American Bank were presenting sponsors for the Newsmakers Forum. Corporate sponsors were American Slide Chart/Perrygraf, Northern Illinois University College of Business and Sam's Club.
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