Uncertainy hinders recovery, industry leaders say
Despite having record amounts of cash on hand, businesses are afraid to spend it. At least that's what a panel of industry leaders at the South Metro Denver Chamber of Commerce 26th annual Economic Forecast Breakfast theorized.
“There's a lot of good signs out there, there's money on the balance sheets, but there's also a lot of cash still on the sidelines,” said Mike Matthews, Wells Fargo Denver market president. “The big question out there is, what role will the government play? What's the fiscal policy going to look like? What's the tax policy going to look like?”
Matthews, along with Al Power, Gates Corp. president and CEO; Gary Campbell, Centura Health president and CEO; Joe Rice, Lockheed Martin Space Systems director of government relations; and Jeppesen President and CEO Mark Van Tine made up a brain trust of local industry leaders gathered, along with more than 800 guests, on Dec. 14 at the Hyatt Regency Denver Tech Center to share views on the future of the economy.
The five-member panel fielded questions from moderator Jerry Healey, president and CEO of Colorado Community Media, each presenting an industry-specific twist on what may or may not happen fiscally at the beginning of the year.
“It's not a question of if it's resolved,” said Rice of the looming fiscal cliff, the conundrum the government faces Jan. 1 when the terms of the Budget Control Act of 2011 are set to go into effect. “It's more of how it will be addressed.”
According to Rice, Lockheed has plenty to lose should the nation tumble over the fiscal cliff, pointing out Lockheed's major customers are government and defense contractors such as the Air Force.
While technology plays a significant role in bolstering the financial future, it too can't move forward without confident investors, said Van Tine, suggesting one of the more certain places to invest may be internally.
“I think one of the best investments you can make is in investing in your own business,” he said. “It's like having money in your pocket and just waiting for someone to come and tell you it's OK to spend it.”
But even as fiscal cliff negotiations progress in Washington, the panel agreed the real key to freeing up cubbyholed cash lies in knowing what lies ahead — good or bad.
Colorado's diverse economic base has helped it survive, according to John Brackney, chamber president and CEO.
Pent-up momentum was a consistent thread throughout the morning discussion.
“We'll probably see a slow start to 2013,”said Matthews. “Hopefully, with more certainty, we'll see more cash come back into the market."