Austin’s business climate in 2011 will be “good, not great,” but is still better than 2010 according to Colin Pope, editor of the Austin Business Journal. He spoke Thursday at the monthly luncheon for Four Points Chamber of Commerce. If you missed his speech, here are some of the highlights.
Pope also made these observations based on his multiple interviews with economists and his experience with the Austin business scene:
- Deep Freeze — This recession has been so deep because of the way is started. In October 2008 “things just stopped and froze abruptly,” leaving an incredible amount of inventory for businesses that still exists today in some sectors.
- Fear Itself — On both the consumer and corporate levels, people aren’t spending their money and instead are choosing to hold onto it out of fear. He estimated there are trillions of dollars in investor money “sitting on the sidelines waiting….Imagine if everyone let go of their fear,” Pope said.
- Health Care Reform — is one major factor slowing recovery. “If you (business owners) don’t know what the rules are going to be down the road, you are not going to want to hire people.” Pope also said that the 1,500-page Health Care Reform bill is still vague and will require literally tens of thousands of specific regulations to implement. Without these regulations, no one has a clear picture of the way health care reform will affect any specific business or sector.
- Silver Lining — The Great Recession has some good points, Pope said. It made companies leaner and more competitive and forces them to work harder. Entrepreneurship has “gone through the roof.”
- Californication — Austin has received incredible press, winning top spots in numerous lists of great places to live. Pope said he personally knew four people from the Bay Area who are moving here in the next three months, largely because it’s “better than Silicon Valley… and I don’t know that many people in the Bay Area.”
- Positive Signs — There are signs of improvement. Real estate plans are starting to move forward. Companies are starting to restock their equipment, such as employee computers and software, a process called “corporate refresh.” And the health care sector, which never lagged during the recession, will continue to boom. Any company supplying needs for health care providers should do well. In fact, one large area health care company estimates it will spend $10 million in IT beginning this year and continuing for several years to come.
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