Unprecedented Crisis, Unpredictable Recovery

A recap of Barnes Dennig's contractor's roundtable

The next few years should be kinder to contractors than the previous few, but the factors that led to our economic crisis were unprecedented, so the recovery will be unpredictable, economist George Vredeveld said last week at Barnes Dennig's quarterly contractor's roundtable.

The interest rate roller-coastered. Individuals and businesses leveraged their assets too far. Federal debt tripled in nine weeks. Eventually, Vredeveld said, the economy will have to adjust to all of those factors. The ongoing questions are how and when it will settle.

"Finding the proper balance will take some time. We have taken big hits to the economy, some of them good and others bad," said Vredeveld, director of the University of Cincinnati's Economics Center for Education and Research.

The local economy is tied greatly to the nine Fortune 500 companies located in Greater Cincinnati, which means the recovery likely will be tied to those companies, as well.
 
Neil Hensley of the Cincinnati USA Regional Chamber told the roundtable audience that 64 companies are currently considering moving into the Cincinnati market. Many of those 64 prospects are suppliers to companies such as Kroger, Procter & Gamble and Macy's. Most will be looking for office space, not necessarily production facilities.
 
Hensley said experts have seen corporate expansion in larger markets such as New York and Chicago. Cincinnati will lag behind, he said, in part because the decreasing number of flights in and out of the airport has made this a less-attractive market for companies headquartered elsewhere. But, Hensley said, expansion should eventually trickle into Cincinnati, because of its proximity to other cities and the talent produced by its numerous colleges and universities.
 
In order to facilitate that expansion, Northern Kentucky offers a series of incentives, including a sales tax rebate for companies that purchase building materials in the area and income tax credits for companies that set up shop there, said Dan Tobergte, president and CEO of Northern Kentucky Tri-Ed. Tobergte emphasized that companies should apply for the incentives before beginning a project.
 
Fifty one contractors attended the roundtable. Of those surveyed, 95 percent rated the presentation good to excellent. "The speakers had plenty of relevant experience to relate current information to past history," one attendee wrote.
 
The next Barnes Dennig contractor's roundtable will be on how to utilize social media. It will be held August 12.
 
- By Tim Weinkam, CPA, and John Strittholt