BizTimes Media's annual Economic Trends event was held Friday morning at the Italian Community Center, before a crowd of about 500. The speakers, economist and University of Wisconsin Foundation president and chief executive officer Michael Knetter, American Family Insurance chairman and CEO Jack Salzwedel, Husco International president and CEO Austin Ramirez and GRAEF-USA president and CEO John Kissinger, shared their thoughts on what the year has in store for their industry and for the overall economy.
Here are some of the biggest takeaways from the event:
2019 exceeds expectations, 2020 outlook steady
For 2020, Knetter, a regular speaker at the Economic Trends event, predicted no change to the S&P 500 index, real GDP growth of 1.7%, an unemployment rate of 3.8%, wage growth of 3.5% and 2.5% inflation.
The U.S. economy performed better than Knetter expected in 2019, especially the stock market. The S&P 500 grew 30% in 2019, after Knetter predicted it would be flat. Overall, economic growth in the U.S. slowed in 2019, but not as much as Knetter expected.
Slow economic growth should continue in 2020, Knetter said.
"This is the longest expansion on record," he said.
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Politics influencing economics
Nearly all of Friday's speakers spoke about the current state of affairs on all levels of government.
Knetter said the future of the domestic economy depends in part on who is elected president in November, and how the markets react. Meanwhile, Ramirez said he worried about the lack of bipartisanship and Kissinger called for a long-term solution to the financing of public infrastructure improvements.
"I think the polarization and division in our country is getting worse, and not better," Ramirez said, noting that gone are the days when major federal legislation was passed on bipartisan votes. "I think that's a pretty major issue when you think about the scale of challenges that our economy is going to face."
Education and workforce issues
A consistent issue for companies in nearly all industries is the lack of talent. Ramirez said Husco has gotten creative in its recruitment efforts, hiring through internship programs and recruiting students as early as high school. Kissinger noted GRAEF recently acquired a company specifically for its workers.
Salzwedel said a key to attracting and retaining workers is providing them with meaningful work and placing them in interesting office locations.
"Current employees that are coming in, they're willing to trade companies if you don't have a road map where you can move them to different jobs within your organization, rather than them have to leave," he said.
Salzwedel also announced at the Economic Trends event that the company would be setting a new minimum wage of $20 an hour for all its employees.
Also important is that the nation build up its workforce through adequate education. Ramirez noted that the U.S. has fallen behind on that front compared with other countries. He added that racial and ethnic disparities exist in educational attainment, particularly in the Milwaukee area, where whites typically fare better as opposed to minority groups.
"This is an existential problem for our nation," he said.
Climate change not going away
Speakers had pretty pessimistic things to say about the future of the planet. Companies must now consider how to deal with issues related to climate change, rather than how to prevent them, they said.
"I really think the battle on climate change is over; I think we've lost," said Ramirez, adding that governments and businesses must now focus on how to best adapt to the warming climate.
Kissinger said a major area of growth he sees for his company is in fields such as coastal engineering, where clients are looking to build facilities and infrastructure in a way that better withstands thinks like rising water levels and more frequent storms.
"Now we're in the mitigation phase of climate change, and just what we can do to deal with it," he said.
Technology disrupting industries
Major technological advancements in things such as artificial intelligence and self-driving vehicles will continue changing the landscape for many industries, the speakers noted.
"Artificial intelligence ... takes the cost of prediction down to almost zero, and our business is built on prediction," Salzwedel said. "How that gets implemented across a large insurance company has tremendous impact on pricing our products but also on our workforce."
Ramirez noted that autonomous vehicles could put many workers out of a job in the future, such as bus drivers and delivery-vehicle drivers.
Knetter said that workers' fear of losing work to new technology has influenced recent slow growth in wages.
"I think there's a lot of fear of technological displacement, even in industries that are doing well," he said. "Even in an industry that's doing well, there's innovation going on that changes the nature of work. And I don't think workers feel as bold about pushing harder for wage increases in that kind of environment."