The second annual Shelby County Business Outlook Conference held on Wednesday, Jan. 25, at the Pelham Civic Complex, offered data indicating a positive economic outlook for 2017.
The event cohosted by the University of Montevallo’s Stephens College of Business and the Greater Shelby County, Montevallo and South Shelby chambers of commerce included a panel discussion with local business leaders, luncheon and business outlook presentation.
The morning began with a business leaders panel discussion moderated by Stephen Craft, dean of the Stephens College of Business at the University of Montevallo.
Sr. Vice President
Shelby Baptist Medical Center
Director of Operations
A. C. Legg
President & Qualifying Broker
The local business leaders offered a macro level outlook on their industry and then an analysis of the local situation in Shelby County.
Keller started the discussion explaining that in the banking industry, technology has changed the way business is conducted. There is less foot traffic in bank branches.
In the near future, they predict that there may be less bank branches and positions such as tellers. He was quick to clarify that it doesn’t mean there will be less jobs. The future jobs in banking would more likely be technology-oriented positions. He predicts a growing need for jobs in data security, online lending and geo-fencing.
Phillips then offered a perspective on changes in the healthcare industry. He predicts the demand for medical care to increase as the Baby Boomer generation ages.
With rising costs in healthcare though, the focus will move from volume to value. The idea is to pay providers for outcomes instead of the quantity of patients they see. This will offer an incentive for efficiency.
Phillips explained that the healthcare system in Birmingham and Shelby County is a competitive industry. According to Phillips, the merger in October 2015 gave Shelby Baptist Medical Center the scale to manage cost risks more effectively.
In regard to employment in healthcare, Phillips said there would continue to be a strong demand in nursing.
Next, Purvis offered an insight into the manufacturing industry. Although we are currently in a service-based economy, he anticipates a light to modest growth over the next few years. Manufacturing is still experiencing a slower than expected recovery from the recession.
According to the statistics Purvis presented, there are 12 million Americans working in manufacturing and another 17 million indirectly supported by manufacturing. At present, 250,000 Alabamians are employed in manufacturing, primarily with auto suppliers, metal manufacturing and metal fabricating.
A. C. Legg, located in Calera, has witnessed a shortage of skilled factory workers in Shelby County. They employ many individuals from the surrounding counties of Bibb and Chilton.
Purvis explained that manufacturing makes up 21.3 percent of total U.S. employment and predicts that number to rise as more manufacturing is moved back to the U.S.
For an outlook into the housing market, Bevis provided statistics showing growth.
Bevis agreed with the other panelists that technology has changed the way business is conducted. Realtors are no longer the primary resource for realty information. Technology offers buyers an abundance of information. However the relationship aspect of real estate has not changed. Realtors now provide the interpretation of data. At the national level, 87 percent of homebuyers ages 20-35 use a real estate agent for the purchase, while 89 percent of buyers age 50+ go through an agent.
Focusing on the local level, Bevis compared the housing market in Shelby County from 2006 to 2016. The average price for a Shelby County home sold in 2006 was $240, 757 and in 2010, $216,908. The average price for 2016 in Shelby County was $245,283.
According to the statistics Bevis presented, Shelby County and Jefferson County are experiencing a sellers’ market. Bevis went on to say that during the month of January, local real estate agencies are seeing more contracts than in January 2016.
As the final panelist, Coleman offered the perspective of a small business owner. “Small business owners are still the heart and soul of the community,” Coleman said.
With the DIY trends, the construction industry has seen an influx of customers who tried to do it themselves. In their construction company, David and Michel Coleman focus on helping people be more practical with their renovations. They want to make sure their customers can obtain a good return on the project’s investment. Coleman pointed out small business owners know that business is all about relationships and word of mouth.
Coleman believes Shelby County is a good place for small businesses in 2017.
While each panelist offered insight regarding a different industry, they all agreed they are cautiously optimistic about the business outlook in 2017.
At the conclusion of the panel discussion, Craft commented that information from this panel provided informative data for the MBA program at the University of Montevallo Stephens College of Business. He explained the MBA program at UM trains leaders in multiple industries.
During the conference luncheon, Craft presented results of a business outlook survey conducted by the University of Montevallo Stephens College of Business and the Greater Shelby County Chamber of Commerce.
The electronic survey polled local businesses from October to December 2016 to determine the economic climate in Shelby County and predict an outlook for 2017.
Before unveiling the localized results, Craft provided macro level statistics as a means for comparison. The projected growth for 2017 in the U.S. is 2.25 percent and globally at 2.7 percent.
“We’re generally in a positive direction both domestically in the U.S. and internationally,” Craft said.
Looking at the local level, the survey’s approximate 200 respondents demonstrated positive outlooks.
Answers revealed that 82 percent of the businesses expect revenue to increase in 2017, compared to 79 percent in last year’s responses. Only 7.4 percent of those polled think revenue will decrease in the coming year.
Increased revenue was not the only growth predicted. Sixty-nine percent expect profits to increase and 86 percent predict debt to remain the same or decrease.
“We seem to be in an upward spiral,” Craft said.
In regard to employment, results indicate that Shelby County employers will move away from part-time employment toward full-time. Full-time employment is expected to increase slightly by 43 percent of the respondents.
The local businesses were also asked what factors impacted their creation of jobs. Results show the cost of unemployment insurance, taxes and fees, cost of workers compensation and cost of benefits have little to no effect on job creation in Shelby County.
Increase in sales and demand for services was the primary deciding factor for developing new positions. Another factor impacting new jobs was recruiting individuals with the skills and experience needed.
“Shelby County, like many developed cities and economic areas, is in a profound talent crunch,” Craft said. He explained that much of this talent crunch is due to the retirement of experienced Baby Boomers.
“We have lots of talented workers coming into the workforce, and we are proud to present our students to the workforce every year, but the ability to back fill those positions is really challenging, and it’s changing the relationship fundamentally of potential employees and employers,” Craft said.
During the collection of data, a natural experiment occurred. Craft analyzed the responses received prior to and following Nov. 8 to determine the impact of the election on responses.
To his surprise, the election did not significantly influence responses. Both point to a positive outlook for Shelby County business.
“The business community of Shelby County said ‘we are going to have a successful 2017 no matter who wins the election,’” Craft concluded.