The Charlotte Region’s business community gathered last week to celebrate excellence in business and discuss the year that lies ahead.
On Thursday, the Charlotte Regional Business Alliance hosted the 2024 Economic Outlook at the Charlotte Convention Center. More than 600 people attended the economic forecast and panel with some of the region’s top CEOs.
Forecast
As the attendees dined, Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond, shared his insight into the economy.
“Right now, we’re in a pretty good place,” Barkin said.
He said multiple contributors have made that happen: The consumer, increased price sensitivity, the labor market, and a healthy step up in productivity.
Barkin said before the pandemic, there was a GDP growth trend in the United States. He believes now, the country is on that same path. He also said people with high and low incomes are all spending more and it doesn’t appear to be slowing down. Instead, the customer is stronger and choosier.
As for the workforce, Barkin said most employers remember the pain of being short workers after the pandemic, particularly within the skilled trades. He said because of that, companies are now slow to reduce their staff. At the same time, job gains have moderated.
“The market we’re in now is a low hiring, low firing environment,” Barkin said.
He noted that it’s an unusual place to be in.
As for what’s ahead, Barkin pointed out that inflation is getting closer to target and unemployment is leveling.
“Where we’re going looks a lot different based on whether you take more signal from the level or the trend,” he said.
Barkin said there are two scenarios for the future. The first is as inflation rates go down and the election is further in the rearview mirror, employers might trust the positive demand they’re seeing and start hiring again.
The second scenario is more negative: Barkin said businesses could keep their “recession playbooks” out. That could lead to firms cutting more costs to maintain margins, leading them to layoffs. That means spending would suffer.
But he said the economy today is in good shape.
“If I had told you two years ago we would be where we are today, you wouldn’t have believed me,” Barkin said.
CEO panel: Economic trends
Andrea Smith, the interim president and CEO of the CLT Alliance, led a discussion with a panel of CEOs whose companies have large footprints in the Charlotte Region. She was joined by Bill Christensen, CEO of JELD-WEN, Robert Isom, CEO of American Airlines Group and American Airlines, and Brian Moynihan, Chair of the Board and CEO of Bank of America.
Smith asked the panel about the most significant economic trends impacting their companies. For Christensen, the answer was interest rates he said are relatively high. He said JELD-WEN is working against a perception that one should wait to buy a home.
Moynihan said interest rates were raised to slow down inflation. He said if inflation keeps going down, the short-term interest rates could settle around this time next year. Moynihan said he believes the economy is healthy and in a good place.
“The economy has been growing faster than people thought it would be growing at this time,” he said.
Technology and artificial intelligence
Smith asked how new technology and artificial intelligence impact each CEO’s company.
“Just about every aspect of the airline…is now collected and analyzed and used in a way that we’ve never been able to put to work in the past,” Isom said.
He said for example, American Airlines is learning how to optimize its processes to better recover from weather events. He said AI is part of that, and continuing to incorporate it could lead to more reliable service for customers.
Both Isom and Moynihan spoke about how AI is not new. Moynihan said Bank of America has been automating for years and it has benefitted them greatly.
Christensen called the building process “highly inefficient,” saying it has many touchpoints. He said eliminating waste could improve the process and said technology could help make that possible. He said the supply chain is very complex, so implementing an improvement like that would need the support of a large coalition,
“Creating an umbrella is going to be the holy grail,” he said.
Christensen said the total cost of building ownership can be reduced dramatically, but big players are needed to make this happen.
Labor force
Isom said American Airlines experienced a shortage of pilots and mechanics coming out of the COVID-19 pandemic. He said now, American is reaching out to communities and to people to pursue careers in aviation, calling it a “guaranteed path to the middle class and above.”
Christensen said they’re also seeing a skilled trades labor shortage in North America. As the economy moves toward automation, he said workers should be thinking more mechanistically. He said the education system needs to catch up with that; with all the growth in the region, schools need to make sure they are educating people appropriately.
Investing in the future
“Charlotte is a fantastic place to do business. A pro-business environment is just critical,” Isom said.
Christensen said the Charlotte Region needs to handle its growth and leaders need to stay ahead of the curve. Transportation and infrastructure are key to making that happen, and both take time. Isom echoed that thought.
“Realize the importance of the decisions that we’re making today, and … understand what is foundational for the future,” Isom said.
He said when we talk about making investments in infrastructure, to make improvements in 10 or even 20 years, we need to invest now.
Moynihan said the Charlotte Region is special because people are willing to have open dialogues about what they can do to make it better. He said Bank of America as a company and the region itself need to use technology to stay ahead.
“We dominate the world’s innovation,” he said.
‘Great place to do business’
The panel ended with Smith asking the three men to address the room filled with business leaders.
“You’ve picked the right place to call home,” Christensen said. “We need your energy and your effort to keep making us better as we look forward.”
“This is a great place to do business,” Isom said, adding that the region’s growth is far beyond anything he could have imagined.
“Your businesses–you’re in a great place, a great environment,” Moynihan said. He asked the private sector to use their expertise to help the public sector and implored them to stay engaged.
Citizen of the Carolinas
The afternoon concluded when Julie Janson, the executive vice president and CEO of Duke Energy Carolinas, presented the 2024 Citizen of the Carolinas award to Pat Rodgers, the CEO of Rodgers and a trailblazer in the construction industry.
The award is given to an individual who, through years of accomplishments, has risen to support all who do business in the Charlotte Region, in areas including civic leadership, public policy, and economic growth.
“I’m deeply grateful for the journey that brought me here,” Rodgers said in her acceptance speech.
