On January 8, 2015, REAG’s Todd Torquato attended the ACG Pittsburgh’s economist luncheon. Bill Flanagan of the Allegheny Conference on Community Development served as the moderator for James Glassman of Chase Bank, Bernard Schoenfeld of BNY Mellon Wealth Management and Augustine Faucher of The PNC Financial Services Group.
The three senior economists provided the audience with their outlook for 2015 including the two factors below that we believe are most relevant to companies in the lower middle market.
1. Job Market: 2014 was the best year for job growth since 1999. Even though each agreed that the calculation of unemployment is not exact, they believed that the job market was getting better based on reported data. This increase in job growth is expected to continue in 2015 taking out the “slack” that was created during the Great Recession. They expect that unemployment and underployment has caused stagnant inflation below the Federal Reserves’ two percent long range goal. So, as the economy continues to get better, inflation will start to creep up so that major inflation corrections by the Federal Reserve will be unnecessary.
2. Economy Still Has Upside: Even though the stock market has tripled in the last 5 years, it has not completely “recovered’ leaving room for earnings and equity markets to improve. Profits remain at an all-time high and businesses want to continue on this trajectory. Since interest rates are still low and government scrutiny of some lending requirements have loosened, those companies that have cleaned up their balance sheet since the Great Recession are poised to grow through acquisition.
Are ready to capitalize on a strong 2015? Do you need help with you 2015 and long range growth plan? See how REAG can help develop your Strategic Ownership Plan.