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Editorial

A year ago this time, we were writing how the pieces would soon start to fall in place for Springfield and this region as a whole and how there would be the start of a snow-ball effect regarding the city and heightened interest as it as a place to live, work, and invest in.

Well, 12 months later, the snowball is starting to take on some size and move at a pretty good clip, making the outlook for 2019 considerable bright locally, even as the picture nationally is becoming increasingly clouded by question marks (see related stories beginning on page 16).

In a way, there are two stories when it comes to the economy: nationally, there is considerable apprehension regarding a slowdown — what’s happening in Wall Street is a perfect example — even though most economic indicators, everything from unemployment rates to demand loans, remain solid.

It will be up the Fed, as well as investors and other constituencies, to sort things out at an intriguing time, when there is growth and doubt — both in very large quantities.

Meanwhile, locally, the region, and especially Springfield, seem to be on the cusp of something momentous, maybe even historic.

Those quoted in the stories comprising the Economic Outlook 2019 section speak of not merely optimism (there’s been lots of that over the years), but interest and activity. Tourism officials talk of rising occupancy rates and hotel-room rates and interest in developing new hotels. Meanwhile, commercial real-estate brokers and managers talk of interest in this market that they haven’t seen in decades — if ever.

Investors are looking at sites for everything from housing developments to cannabis dispensaries and everything I between.

It’s not as simple as ‘if you build it, they will come,’ but in many ways it is.

And what we’re building is a vibrant, livable, accessible city (and region) that people and businesses want to be part of. We have a long, long way to go, but more of those aforementioned pieces are falling into place, and more should come in the next few years.

MGM Springfield was certainly a big piece. It brought jobs, foot traffic, and interest in Springfield from people who might have had to look at a map or rely on the GPS system in the car to find it.

But there are many other pieces as well: Union Station and enhanced rail service are making it easier to get to the city; renovation of Stearns Square, Riverfront Park, and other facilities will make Springfield more livable; businesses and institutions moving into the downtown and investing there are prompting others to consider following suit; and an improved police presence is contributing to less apprehension about public safety — not to mention the many colleges now populating downtown, the ongoing remaking of Tower Square (White Lion Brewery will soon be moving in), the cannabis industry, and more.

When things like this start to happen, a city becomes more saleable as a place to live, and we’re seeing considerable interest in development of market-rate housing in and around downtown.

And when more people start to make the city their home address, more businesses — more restaurants, more clubs, some cannabis dispensaries, and more service-related ventures — will follow.

And then more people will want to relocate here, and more businesses will follow. That’s the theory, and in practice — and in some cities, like Cambridge, Lowell, and others — it works.

Will it work here? Perhaps. The signs are there. The pieces are falling into place, and the snowball is starting to take on size.

If 2018 was a year to build some momentum, then 2019 will be a year to capitalize on it. Big time.

Autos Sections

Driving Forces

The auto market has been in high gear for the past several years, and area dealers expect that pattern to continue, and for several reasons. These range from a solid economy and abundant consumer confidence to quality vehicles and lingering pent-up demand.

‘Flat.’

In most discussions involving business, that term has a somewhat negative connotation to it. And in many ceases, we can leave out the ‘somewhat.’

But in the case of the auto-sales industry and local dealerships … ‘flat’ has a pretty good sound to it these days. In fact, just about everyone who would use images of George Washington and Abraham Lincoln in their promotions this week, or tie red, white, and blue balloons to the cars in their showroom come July, would be pretty happy with ‘flat.’

Just as they were last year.

Indeed, since the very dark days during and just after the Great Recession, car sales have rebounded nicely, with the high-water mark, if you will, coming in the 2016 sales year, with nearly 17.5 million light vehicles (cars, SUVs, and pickup trucks) sold nationwide.

Last year was off that pace, but only slightly, with more than 17.1 million light vehicles sold. And the projections for 2018 are for pretty much the same, with maybe another slight decrease of 1% or less.

But, again, 1% off what? Even in the super-solid years leading up to the economic nosedive a decade ago (years 2001 to 2006), total sales were under or just slightly above 17 million.

As we said, ‘flat’ has rarely looked so good.

“Yes, last year was off what it was in 2016, but you’re coming off historic highs — and the drop was minuscule,” said Jeb Balise, CEO of Balise Motor Sales, adding (after checking his phone to make sure he had the numbers right) that sales this January were up 1% over a year ago, this despite some bitterly cold days, a few snow days for many adults, and even that dreaded bomb cyclone thing.

Jeb Balise says projections are for another flat year for auto dealers. But ‘flat’ is more than acceptable given the high volume of sales in recent years.

Jeb Balise says projections are for another flat year for auto dealers. But ‘flat’ is more than acceptable given the high volume of sales in recent years.

And the various forecasts he’s seen project sales of between 16.7 million and 16.9 million light vehicles, which would be another outstanding year.

Other dealers we spoke were equally upbeat and happy with ‘flat’ or something approximating it, and said a host of factors are contributing to solid sales and optimism that this trend will continue. A healthy stock market (until quite recently), a sound economy, still-low interest rates (albeit amid concerns that they will rise), low unemployment, large amounts of consumer confidence, well-made products, lots of inventory, attractive incentives from the manufacturers, some lingering pent-up demand, and the basics of supply and demand are all on that list.

“It’s just a good time to be buying a car,” said Don Pion, president of the Chicopee-based dealership started by his father, Bob Pion Buick GMC. “The product is good — the best I’ve seen since I’ve been in the business. They’re good products, they get good fuel economy, maintenance is pretty inexpensive on these new cars today, the manufacturers have been aggressive with their offers, there are good lease offers … it’s all good.”

Michelle Wirth, co-owner of Mercedes-Benz of Springfield, which opened its doors last fall, concurred.

“We have a very optimistic outlook on 2018,” she said. “People are feeling good about the economic outlook, and that allows them the mindset to spend money a little more than they would have in years past.”

Meanwhile, solid sales are not the only trend within the industry on track to continue. Others include the soaring popularity of SUVs and crossovers — Wirth noted that, for the first time last year, Mercedes reported more sales of those types of vehicles than cars — and an ongoing evolution in the role of the dealership.

Indeed, where once that was a place to check out the new models, see what they cost, and explore available options, consumers can now do a lot of that, if not all of that, on the Internet. By the time they come to the dealership, they know what they want, and they know what they expect to pay. Thus, the role for those at that facility is to make the rest of the process as quick and painless as possible.

In response, TommyCar Auto Group, comprised of three dealerships selling Nissan, Hyundai, and Volkswagen, has come up with a new product called Click, Drive, Buy, whereby the consumer can do pretty much the entire buying or leasing process online, and also get a car delivered to their home for a test drive.

“They can fill out a credit application, do the pricing up front, they can go through all the financing options and rebate options and see what they qualify for, all without coming to the dealership,” said Carla Cozenzi, president of the group. “They can even research all of the after-market products like warranties and gap insurance, all of that through our website.

“We’ve evolved because we had to,” she went on, speaking for everyone in the industry. “Customers can literally do it all from their iPhone.”

Fast Times

As he talked about the current market and the forces driving it, Pion referenced one recent vehicle traded in to get some of his points across.

“It had 250,000 miles on it, but it looked like it only had about 50,000 miles on the odometer,” he told BusinessWest. “It was in great shape; you would never know it had a quarter-million miles on it.”

And this was certainly not an isolated incident, he went on, adding that these high-mileage vehicles he’s seeing on a regular basis say a lot about the market today.

They speak to the quality of the cars on the road today and their durability — “you watch the cars drive by every day, and you see a lot of older models,” said Pion — but also to the fact that, eventually, people need, or want, to turn them in.

And this lingering pent-up demand for new models — although there is much less of it than was a few years ago — is just one of many reasons why Pion’s dealership had a 2017 to remember.

Don Pion, seen here with his son, Rob, general manager of the dealership, says the soaring popularity of SUVs and crossovers has helped fuel solid sales for the industry.

Don Pion, seen here with his son, Rob, general manager of the dealership, says the soaring popularity of SUVs and crossovers has helped fuel solid sales for the industry.

Indeed, Buick sales were up 40% over 2016, he said, while GMC sales were up 30%, and used-car sales were up 20%.

Pion attributed these strong numbers to that combination of factors he described above. And while he’s not expecting a repeat, exactly, he’s projecting another very solid year.

“No one’s looking to set a record,” he told BusinessWest. “But I don’t think we’ll see any declines, only more-modest growth, perhaps.”

Consenzi agreed, and told BusinessWest that 2017 was a solid year for all three stores within the group, especially Nissan, and she is expecting improvement on those numbers across the broad in 2018.

Balise was also optimistic, and said that the pent-up demand from several years ago has been replaced by a state of general “equilibrium,” as he called it. Surveying the market now, he sees still-ample demand and considerable inventory, an intriguing mix.

“Business is good, and plenty of cars are being sold,” he explained, “but it’s a little more competitive amongst dealers, which is always good for the consumer.”

As for Wirth, she doesn’t have any numbers from last year to use as the basis for projections, or many of them, anyway.

As noted, the dealership opened its doors in September, and that last quarter or so of 2017 was essentially a time for reintroducing the brand to this region after nearly a decade’s absence, she said, adding that this process is ongoing and has many nuances to it.

Indeed, reminding people that they no longer have to drive to Hartford or Route 128 to buy a Mercedes or get one serviced is just part of the equation, she went on.

Another big part is introducing the region to the people behind that dealership with the huge Mercedes sign in front of it — and they’ve done so in ways ranging from a huge grand opening to a presence on the ice at the MassMutual Center for Thunderbirds games, to various forms of support for several area nonprofits.

Still another is educating people about the brand, how it has evolved in some ways — all those SUVs, for example — and making it clear that, in many cases, and despite popular perception, it is not beyond their reach.

“The brand stands as a symbol of success and the ultimate in luxury, and it’s just a big brand to wear,” Wirth explained. “Mercedes is not just for folks who have made it or are about to retire and end their career; it’s very much for the person who’s still climbing.”

Elaborating, she said the dealership, and Mercedes-Benz in general, are trying to attract people not of a certain age group or income bracket, but people with a certain mindset.

“They’re young at heart, they’re entrepreneurial, they enjoy craftsmanship and brands that stand for something,” said Wirth as she explained this mindset. “As for the brand, they look at it like, ‘this is this best, everyone deserves the best, so reward yourself.’”

Into a Higher Gear

Getting back to the outlook for 2018 and the factors driving those optimistic projections, one of the influencing forces is the quality of the vehicles now parked at dealerships across the region. Indeed, while those cars and SUVs with 100,000 or 200,000 or even 300,000 miles on them are still getting the job done, the products rolling off the assembly line are appealing — enough to prompt some trade-ins.

Michelle Wirth says the role of the dealership continues to evolve, and the focus now is on transparency and making the consumer’s experience as easy and painless as possible.

Michelle Wirth says the role of the dealership continues to evolve, and the focus now is on transparency and making the consumer’s experience as easy and painless as possible.

Especially the crossovers and SUVs. As noted earlier, even brands that have built their heritage on sedans, like Mercedes, are selling more SUVs than cars these days. Buick, known for most of its existence for its sedans, now has a lineup flush with SUVs and crossovers, said Pion, and there’s only one true sedan left — the LaCrosse.

The Balise company counts nearly a dozen makes in its portfolio, including Ford, Chevrolet, Toyota, Honda, Nissan, Lexus, Mazda, Subaru, Kia, and more, and for nearly all them, SUV and crossover sales now exceed those of sedans, said Jeb Balise.

And there are many reasons for this, everything from relatively low gas prices to the additional room in the SUVs and crossovers; from the added height of such vehicles, and the fact that they’re somewhat easier to get in and out of, to their ability to take someone virtually anywhere they want to go.

“People are more active,” said Wirth. “They want to go more places and do more things, and those vehicles present themselves as being more versatile.”

Cosenzi agreed, and noted that most manufacturers, including those she represents, now have SUVs and crossovers in small, medium, large, and even micro sizes, and they are attracting consumers in all age groups. And for most people trading in a car, she said, the SUV they’re getting into will offer comparable mileage.

Even Volkswagen, which has traditionally lagged well behind in SUV and crossover sales, is making great strides with additions like the Tiguan, a smaller SUV, and the Atlas, a much larger model.

“Volkswagen always lacked in that category, but now it’s catching up,” she said. “We’re seeing it across all brands — the demand is really healthy in the SUV/crossover market.”

All that said, compact and mid-sized cars are still a huge segment of the market, said Balise, using one of the more iconic nameplates, the Toyota Camry, and some numbers off the top of his head to get his point across.

“Let’s just say Camry was selling 400,000 units and now they’re selling 315,000; that’s still a lot of momentum for that segment,” he said. “While the phenomenon is happening and it’s material — it impacts business, and we have to figure out what to do — it’s not a total-sum game. Sometimes you look at these reports and it looks like you’re never going to sell a car again, and it’s all going to be trucks — it’s not that dramatic.”

But it is still a sizable movement within the industry, as is the overall ‘dealer experience’ and the changes that have come to it, and the ever-greater emphasis on transparency and all that phrase implies.

As noted earlier, much goes into this equation, but it comes down to making life as easy as possible for the consumer during and after the buying or leasing process.

Putting it another way, Wirth said, while no one realistically expects to enjoy the car-buying process, dealers, and especially hers, are succeeding in making it far less painful that it was years ago.

How? By being up front and transparent with pricing, putting information in consumers’ hands, and adding convenience when possible, such us applying for financing online.

Balise agreed. “When it comes to the customer, their time is extremely important to them, and they don’t want to waste it,” he explained. “So when they come in, you need to be on your game and give them the information in an easy, transparent way; what you’re really doing is being as helpful as you can to help them make a decision.”

Pion echoed those thoughts, noting that a good number of people who come into a dealership ready to buy want to drive off in their new vehicle the next day — or even later that day — and dealers have to respond to such whims with inventory and an ability to get such deals done.

But these efforts to enhance the customer experience don’t end with the sale, as those in this industry like to say. Indeed, service is a huge part of the equation, especially with cars remaining on the road as long as they are, and emphasis on this part of the experience manifests itself in everything from spacious, well-appointed waiting areas to car washes built into the dealerships.

At the Mercedes dealership, said Wirth, the technician will create a video of the vehicle in for service and text it to the customer so he or she can see what the issue is.

“We’re in it for the long haul, and it’s more valuable to us and more important to us that people feel taken care of and understood,” she went on. “It’s more about how we meet people’s needs at that moment in time and have all the information at that moment.”

Full Throttle

The dealers we spoke with said those Presidents Day sales that once dominated the airwaves and turned Washington and Lincoln into pitch-people are still a part of the landscape, just not on the same scale as years ago.

Those sales were needed to propel the industry out of winter doldrums and create a bridge to spring, said Pion and Balise, both industry veterans. Today, car selling is different, and there is more of a even flow of transactions throughout the year — although a boost in February is always welcome.

That’s just part of a changing landscape in this business, where ‘transparency’ is now the watchword, and where ‘flat’ sounds really good.

George O’Brien can be reached at [email protected]

Cover Story Economic Outlook Sections

Experts Don’t Foresee Any Rocking of the Economic Boat

economicoutlookartMore of the same. That’s what the experts are predicting for this region, and the country as a whole, when it comes to the economy. And by more of the same, they mean growth that is steady if unspectacular — even with tax reform — and few if any signs of what could amount to real trouble. “Another boring year,” was how one economist put it. But for many businesses, boring is more than acceptable.

As a student — and a professor — of economics, Bob Nakosteen fully understands that the region and the nation as a whole are, as they say, due for a recession.

Maybe even overdue.

Indeed, eight and a half years is a long time to be in an expansion, if history and especially 20th-century history is any guide, and that’s about the length of the run the country has been on, said Nakosteen, a long-time educator at UMass Amherst who pegged the summer of 2009 as when the Great Recession ended and the upswing — as unspectacular as it has been, for the most part, in this region — began.

But he quickly noted that there’s no actual relationship between how long a country has been in an expansion and when it’s due for a recession. Time isn’t officially one of the factors that determine such things, he noted, adding that none of the issues and indicators that do are — at this moment, at least — pointing toward recession.

Bob Nakosteen

Bob Nakosteen

The issues in the state economy, especially in Western Massachusetts, are not macro-economic nearly as much as they are structurally micro-economic; there are individual sectors that are really struggling.”

“The expansion is old, certainly, but there’s nothing on the horizon to interrupt the expansion,” he told BusinessWest, adding quickly that a host of factors will shape what course a continued expansion takes. “The issues in the state economy, especially in Western Massachusetts, are not macro-economic nearly as much as they are structurally micro-economic; there are individual sectors that are really struggling.”

Karl Petrick, an economics professor at Western New England University, agreed, and summoned another word for what he’s projecting for at least one more year: boring.

Karl Petrick

Karl Petrick

Trickle-down doesn’t really come to fruition the way people say it will. It’s been promised for decades and decades, but it’s never really happened.”

“Unless you were on Twitter, last year was pretty boring,” he said, tongue firmly planted in cheek while focusing his remarks on what was happening in this region economically. And that was essentially the same thing that’s been happening for the past several years — steady if unspectacular growth that amounts to a few percentage points on average and not the kind of boom times that traditionally follow a recession, especially like the one of almost a decade ago now.

“Even with the tax break, the projections are for the U.S. economy to grow at 2.5% in 2018, and in 2019, 2.1%,” he said. “And if we did see a big increase in growth, it’s very likely that that the Fed will raise interest rates to slow down inflation. The forecast is for another boring year — I hope.”

Indeed, for many in business, boring translates into a decent year, and that’s what Tom Senecal, president of Holyoke-based PeoplesBank, said many of his clients — commercial and residential alike — experienced.

He told BusinessWest that the residential real-estate market is enjoying a surge fueled by low inventories, and that many individual sectors are experiencing steady growth. And he expects tax reform to lift most boats still higher.

Tom Senecal

Tom Senecal

Inventory is extremely low in many area communities, and this is having a big impact on prices. We’re going back to seeing sale prices in excess of asking prices, and that hasn’t happened since the late ’80s and early ’90s.”

“With corporate tax rates projected to decrease from 35% to 20%, that will have a significant impact on most businesses,” he went on. “I expect that to be a determining factor in what our local economy will be like in 2018.”

There are other determining factors, obviously, and some areas of concern, both nationally and locally, including persistently stagnant wages.

Despite steady growth in the economy and soaring corporate profits that have fueled a nearly 20% rise on Wall Street this year, wages have remained flat, said Petrick. And he doesn’t believe — despite what leading supporters say — that tax reform will change that equation. And if wages remain stagnant, that might slow the economy down.

“Trickle-down doesn’t really come to fruition the way people say it will,” he explained. “It’s been promised for decades and decades, but it’s never really happened.”

Meanwhile, Nakosteen said the precipitous decline of traditional retail could pose some problems regionally (more on that later), as could a host of other factors ranging from escalating student debt to tighter immigration laws that could keep some foreign students from landing on area college campuses.

But overall, these concerns are not expected to significantly alter the picture or impact those projections for more of what the region has seen over the past several years.

Onward and Upward

“Stable.”

That’s the word Senecal summoned early and often as he talked about the local economy, and it’s another word business owners always like to hear.

He said the region’s economy has historically been fueled by education and healthcare (‘eds and meds’), and that trend continues. And those sectors are, well, stable, to say the least.

“If you think of the spin-off economies in the Western Mass. market, we clearly benefit from those sorts of industries [healthcare and education] that are not recession-proof, but they certainly come through recessionary times much more stable than the rest of the economy,” he said. “And I see this in the numbers from our residential loans and our commercial loans. The stability and continued growth has been there, and we expect it to continue throughout next year.”

Beyond eds and meds, Senecal noted, a number of sectors are doing “pretty well,” as he put it. These include ‘green’ energy businesses, commercial construction (although moreso in the eastern part of the state than this region) and the residential real-estate market, which, as noted earlier, has picked up dramatically over the past few years.

“Inventory is extremely low in many area communities, and this is having a big impact on prices,” he explained. “We’re going back to seeing sale prices in excess of asking prices, and that hasn’t happened since the late ’80s and early ’90s; it’s clearly a seller’s market right now.”

Surveying the scene locally as well as nationally, those we spoke with said there is no indication of anything that will disrupt this stability to any significant degree.

But that doesn’t mean there aren’t some question marks concerning the year ahead. And perhaps the biggest concerns tax reform and what it will mean.

Petrick and Nakosteen said such reforms — usually measures to be administered during a recession, not an expansion — can’t (or shouldn’t) be expected to trigger the wage hikes and subsequent consumer spending predicted by supporters of the legislation, because … well, because history shows this isn’t what happens, they told BusinessWest.

“Tax cuts really have little effect,” said Nakosteen, “especially when the economy is not in recession and is near full employment.”

Also, early and unofficial polling of business leaders indicates that wage increases for their employees are not in their plans.

“Many big corporations have already said that, whatever tax breaks they get, they’ll use them to buy back stock,” Petrick noted. “That will do wonders for the stock market, but there’s no indication they’ll use that tax break to raise wages.”

But Senecal projected that tax reform might, in fact, provide a real boost for the economy in the form of investments made by business owners.

“Tax reform has a significant impact on corporate spending,” he opined. “I think that, right now, a lot of businesses are waiting and seeing on tax reform to determine how aggressive or reserved businesses are going to be come 2018.”

Economic Indicators

As for other factors that might impact the year ahead, to one degree or another, Petrick put wages, and the stagnancy of same, at the top of that list.

“We see growth, but the foundation for continued growth continues to be a little bit shaky, in terms of wages at the national level and the state level,” he told BusinessWest. “They’re just not growing, even as unemployment comes down.

“And that is a bit of conundrum for us at the state level and the federal level, because that puts more pressure of households, especially with uncertainty with what’s going to happen with the individual mandate and how that might impact insurance rates,” he added. “It also impacts state tax revenue, because if wages don’t go up, the state doesn’t collect more.”

There are many reasons why wages are stagnant, he went on, listing everything from soaring health-insurance costs for employers to the decline of labor unions, to the retirement of Baby Boomers and their replacement by younger workers earning lower salaries. But the bottom line is that, generally, flat wages are not good for the economy.

Meanwhile, Nakosteen said the continued decline of traditional retail would further change the local landscape, and it might impact the economy in some ways.

Giant retailers like Sears, Toys R Us, Kmart, and others are closing stores in huge volumes, leaving malls with large boxes to fill (or not, as the case may be) and worries about their very existence. Meanwhile, many smaller retailers are disappearing from the landscape, for reasons ranging from the intrusion of online shopping to a lack of a succession plan.

All this is creating a number of empty storefronts and a lot of commercial real estate for sale and lease, said Nakosteen, adding that the problem is impacting even the most vibrant of downtowns, including Northampton’s, where tenants are asking, ‘why are lease rates so high if so many storefronts are empty?’

“And that’s a very good question,” he said, adding that the higher rates will impact existing retailers and perhaps dissuade others from coming downtown.

But it’s an issue in nearly every area community.

“There are so many empty storefronts,” Nakosteen went on, “and the retail sector is so important to so many downtown areas.”

Meanwhile, workforce issues might also have an impact on the course and strength of the ongoing expansion, he noted, adding that a lack of qualified workers within some sectors might stifle growth.

“The state, as a whole, has issues with the labor force not growing fast enough to accommodate the economy,” he explained. “And Western Mass. is even worse. We have very slow labor growth here; you can’t grow the economy faster than you can hire people to fill the jobs.”

Interest rates could play a role as well, the experts noted, adding that, if the economy does start heating up, the Fed will likely raise rates to keep it from overheating and sending inflation higher.

“Prime rate effects people’s home-equity loans, and it effects commercial borrowers,” Senecal explained. “And if the Fed increases rates two or three times, and that’s clearly their intent, that could have an impact on spending.”

Bottom Line

‘Stable. ‘Boring.’ ‘Steady.’ Those aren’t exactly headline-generating adjectives when we’re talking about the economy and where it might head in the months to come.

But they represent reality, and for many in this region — which, as has been noted countless times in the past, doesn’t enjoy stunning highs and crippling lows like other regions — those words are welcome, and much better than the alternative.

And if tax reform works, as Senecal and others believe it might, the region just might wind up doing better than ‘more of the same.’

 

George O’Brien can be reached at [email protected]

Economic Outlook Sections

On the Bright Side

By Richard Sullivan

Richard Sullivan

Richard Sullivan

The state of the region’s economy is strong, and the economic outlook is bright. That’s a simple statement, but let’s look at the facts that support that optimism.

We all have read of the important investments that MGM and CRRC, the Chinese rail-car manufacturer, are making in Springfield. Less-reported is the some $5.2 billion of economic-development projects that have recently occurred or are currently underway in our region.

In a 2016 study, the Economic Development Council of Western Mass. (EDC) catalogued the growth in each community — from housing developments to manufacturing companies expanding and relocating to the area; from transportation investments to growth in our public and private education systems. That study shows strong and important regional investments, and this trend is continuing.

MGM and CRRC are certainly important regional economic-development projects for the jobs they are creating, the taxes they will pay, and the many public benefits they are required to provide through their host-community agreements. However, the biggest economic impact the projects will have is when they contract with local businesses as part of their operational and supply chains. MGM specifically is using best efforts to annually contract locally for $50 million in goods and services. These dollars will stay local, provide additional economic opportunities, and create more jobs in companies that are part of the fabric of our communities, hiring our neighbors, paying local taxes, and supporting our local charities. It is an opportunity we are capitalizing on, but one that we can’t lose sight of.

Another bright spot within the local economy is tourism. You may think Boston, San Francisco, or New York, but maybe not Western Mass., when it comes to this important sector. However, tourism is the third-largest industry in the region. Approximately 3 million visitors come to the area each year, spending $750 million, producing an estimated $17 million in state and local taxes, and supporting 5000 jobs.

Mary Kay Wydra, president of the Greater Springfield Convention & Visitors Bureau, is bullish on the growth of tourism in Western Mass., with the addition of MGM, the Dr. Seuss Museum, a soon-to-be-refurbished Basketball Hall of Fame, continued investment at Yankee Candle and Six Flags, and more. She is confident that annual visitorship will grow. Tourism is a vital part of our economy and will become even more important beginning in 2018.

Still another source of optimism and good news is the growing amount of entrepreneurial energy in the region.

Indeed, at the recent “State of Entrepreneurship in the Valley,” hosted by Steve Davis and the EDC entrepreneurship committee, the focus was on the growth of a relatively new sector for the region — innovation, startups, and entrepreneurship. In 2015 and 2016 alone, more than 9,000 people attended a Valley Venture Mentors (VVM) event; there are currently 613 part-time and 227 full-time jobs in the startup ecosystem, and just under $27 million of revenue and investment was created in the region. If all the startups were under one roof, they would represent the 11th-largest company in Springfield.

The entrepreneurship ecosystem is growing up and down the Valley. VVM works closely with initiatives in Franklin County and SPARK in Holyoke; our local colleges and universities have all carved out leadership positions; Greentown Labs, based in Somerville, Mass., has opened a manufacturing office at the Scibelli Enterprise Center; and the Grinspoon Entrepreneurship Initiative is a national leader in elevating the importance of entrepreneurship and recognizing entrepreneurial excellence among college students. A new group, Women Innovators & Trailblazers (WIT), is establishing itself in order to ignite a women-led innovation economy in Western Mass. and beyond. This is an exciting and quickly growing sector in the region.

I see additional new sectors growing in the region that can become centers of excellence for Western Mass. This year, UMass Amherst, in cooperation with the EDC, hosted an event highlighting its national leadership position in the field of green technology and the environment. The event was sponsored by the Massachusetts Clean Energy Center and focused on building technologies, water innovation, and clean energy and storage. Companies from across Massachusetts came to discuss the quickly growing green-technology cluster and the partnerships that can be developed between the private sector and the university for research and development, but also talent development.

Bay Path University recently staged its fifth annual Cybersecurity Summit, showcasing the work it is doing in the field of cybersecurity. President Carol Leary, who serves as a member of the Department of Homeland Security’s Academic Advisory Council, said “it is critical for higher education to be a central part of this emerging cyber ecosystem. We are developing the right talent, the diverse talent needed to be a part of the cybersecurity workforce. To the students pursuing a cybersecurity career — you are the future, you are qualified, and we need you more than ever.”

Western Mass., because it is home to a significant number of universities, colleges, community colleges, and technical schools, finds itself in an enviable position because it can supply the workforce of the future.  Still, there is no doubt that the biggest issue facing our existing companies, and the companies of the future, is their ability to find, develop, and retain a high-quality workforce.

We need to coordinate with all the great workforce-development organizations in the region and leverage the high-quality education institutions that call Western Mass. home to meet this demand.

When we do, our future economy will be bright.

Richard Sullivan is president of the Economic Development Council of Western Mass.; [email protected]

Daily News

AGAWAM — With more than 800 members concentrated in Massachusetts, Rhode Island, and Connecticut, the Employers Assoc. of the NorthEast (EANE) unveiled the national and regional findings from the 2017 National Business Trends Survey conducted by the Employer Associations of America. Results were gleaned from 1,528 participating organizations, covering 2,741 employer locations throughout the U.S.

According to the national survey results, businesses continue to have an optimistic outlook for 2018 and are preparing for a positive year ahead, with 62% expecting their 2017 sales/revenue to be slightly or significantly better compared to 2016. Continued optimism prevails, as 73% of executives project slight to significant increases in sales/revenue for 2018. However, that optimism is tempered by several serious challenges to business growth, particularly from the shortage of both skilled labor and professional/technical staff, and the ability to pay competitive wages and benefits.

“The survey data certainly reinforces that finding talent is a concrete problem that cannot be put off until tomorrow; employers have to take stock of and plan for their staffing needs today,” said Mark Adams, director of HR Services at EANE.

Highlights of the findings for the Northeast region include:

• For employees, the grass is looking greener. While an economy remaining on the upswing may bode well for employers in many respects, it is not without some challenges. When asked the primary reasons for their 2018 hiring plans, 84% of the executives said they will be replacing staff due to voluntary turnover, and 78% said their hiring will fill new jobs.

• More employers are seeking to hire in 2018 than in 2017. In the Northeast region, 51% of the executives surveyed plan to increase staff in 2018, representing an increase from 41% in the 2017 report.

• The skilled-labor shortage is becoming a greater concern. Despite the need to hire by many regional employers, the ability to find talent remains a problem as 42.3% of regional respondents identified the skilled labor shortage as a “serious” challenge in the short term (up from 37.8% last year) while 52% of respondents identified it as a “serious” challenge long term (up from 47% last year). These concerns are also reflective of the actual experiences faced by respondents, as 59% said they were unable to find skilled labor (an increase from 52% last year).

• Infrastructure remains a prevalent focus. With the economic outlook remaining positive and employers seeking to hold onto their own talent any way they can, regional employers are committed to expanding their investment in employees, processes, and systems for 2018.

Daily News

FARMINGTON, Conn. — Farmington Bank invites business leaders and media members to a webinar on Wednesday, May 24 from 10 to 11 a.m. titled “What Region Is Doing Well? What Region Isn’t? And Why? A Look Into the Current Economic Conditions of the Hartford and Springfield Regions.”

Don Klepper-Smith will provide insights on the current economic outlook of the Greater Hartford and Springfield regions in a one-hour webinar, including a question-and-answer session. Klepper-Smith is chief economist and director of research at DataCore Partners and economic advisor for Farmington Bank. A professional economist for 30 years, he is frequently quoted by media sources for his perspective on the economy in the region. He specializes in evaluating consumer markets, assessing the generators of consumer wealth, and delivering insight on business conditions as they relate to credit markets and employment growth.

To register, click here.

Agenda Departments

Economic Outlook Luncheon

April 20: The stock market is up, and soon, so might be interest rates. The Trump administration wants to make historic budget cuts, and unemployment rates are at historic lows. While these are much better than the worst of times for local businesses, are they going to turn into the best of times? Business leaders, who do not like uncertainty, will get some insights into the economic future at the PeoplesBank Economic Outlook, a free luncheon featuring James Hartley, professor of Economics at Mount Holyoke College. The luncheon will take place from noon to 1:30 p.m. at Willits-Hallowell Conference Center, Mount Holyoke College, 50 College St., South Hadley. It is open to the public, but space is limited, and registration is required. “The economy is improving, and business owners want to know where it is going,” said David Thibault, first vice president, Cash Management at PeoplesBank, who will introduce Hartley. “At this luncheon, we hope to give them some of the data necessary to help with business planning for this year and next.” Registration information can be found at bit.ly/pb-register.

Planned-giving Seminar

April 20: Berkshire Taconic Community Foundation and the Nonprofit Center of the Berkshires invite nonprofit executive directors, development staff, and board members to attend “Planned Giving Basics: What Every Nonprofit Should Know.” Led by planned-giving consultant Ellen Estes of Estes Associates and attorney Virginia Stanton Smith of Smith Green & Gold, LLP, the workshop will be held from 1 to 4 p.m. at Saint James Place, 352 Main St., Great Barrington, Mass. This training will explore the various elements of planned giving, including how to launch a planned-giving program, identify prospects for planned giving, discuss giving options, and build personal relationships with donors and prospects. This event is part of Berkshire Taconic’s popular annual “Seminars in Nonprofit Excellence” series. Tickets cost $40 per person, and light food and beverages will be provided. To register, visit www.berkshiretaconic.org/pgbasics.

Trump’s First 100 Days

April 21: Glenmeadow will present a panel of political analysts who will lead a discussion about President Trump’s actions in office thus far. The event will take place from 10 a.m. to noon at Sleith Hall’s Wood Auditorium at Western New England University, 1215 Wilbraham Road, Springfield. The election of Trump as the 45th president of the U.S. polarized the country. In Glenmeadow’s program, called “The First 100 Days: Governing Across the Great Divide,” the panel will look at Trump’s first 100 days in office and discuss his performance on topics including domestic and foreign policy, healthcare, immigration, polling, and media coverage. Political analyst Bill Scher, a contributing editor to Politico and the founder of the blog liberaloasis.com, will serve as moderator. Other panelists will include Tim Vercellotti, professor of Political Science at Western New England University and director of the New England Polling Institute; political consultant Tony Cignoli; Ron Chimelis, a columnist for the Republican; and Marie Angelides, an immigration attorney with her own firm and chair of the Longmeadow Select Board. The program is free, but seating is limited, and registration is required. To register, call (413) 567-7800 or e-mail [email protected] Visit glenmeadow.org/learning for more information. Glenmeadow Learning is one of many free programs Glenmeadow offers to members of the wider community. These programs represent one facet of the life-plan community’s mission to serve seniors across the region and to operate as a socially accountable organization.

Real-estate Sales Licensing Course

May 1: Beginning Monday, May 1, the Realtor Assoc. of Pioneer Valley will sponsor a 40-hour, 14-class sales licensing course to help individuals prepare for the Massachusetts real-estate salesperson license exam. The course will be completed on June 1. Tuition is $359 and includes the book and materials. The course curriculum includes property rights, ownership, condos, land use, contracts, deeds, financing, mortgages, real-estate brokerage, appraisal, fair housing, consumer protection, Massachusetts license law, and more. Classes meet Monday, Wednesday, and Thursday evenings from 6 to 9 p.m. at the association office, 221 Industry Ave., Springfield. For an application, contact Joanne Leblond at (413) 785-1328 or [email protected], or visit www.rapv.com.

Forum for Stroke Survivors, Caregivers

May 3: May is National Stroke Awareness Month, and the American Stroke Assoc., a division of the American Heart Assoc., will once again host a forum open to stroke survivors and their caregivers. The 2017 Pioneer Valley Stroke Survivors and Caregivers Forum, “The Future Belongs to Those Who Dream,” will take place at the Log Cabin in Holyoke. Close to 300 people are expected to attend the event, which is designed to bring together stroke survivors and caregivers so they may become better connected with the network of resources available. The event will run from 9 a.m. to 2 p.m., and the day will include exhibitors, local healthcare providers, and stroke survivors who will educate and share information. The forum will once again be hosted by Boston comedian and American Stroke Assoc. supporter Chris Tabb, whose family has been personally touched by stroke. The Pioneer Valley Stroke Forum is open to the public, and admission is $5, which will include a light breakfast and heart-healthy lunch. For tickets, call the American Heart Assoc. local office at (203) 303-3373.

‘Big Data … Your Strategic Advantage’

May 10: As part of the ongoing BusinessWest and HCN Lecture Series, Comcast Business will host an informative program titled “Big Data … Your Strategic Advantage.” The event is part of a series of lectures, panel discussions, and presentations that address timely and important business information. This is an opportunity to meet industry leaders and network with area business professionals. “Big Data … Your Strategic Advantage” will be presented by Dennis Perlot, vice President, Enterprise Architecture at CleanSlate Centers, and former ‘technology evangelist’ at Microsoft and BI specialist master at Deloitte. It will take place at La Quinta Inn & Suites, 100 Congress St., Springfield. Perlot will address how other organizations are using their data to provide them with a competitive advantage. Attendees will learn how data can be analyzed for insights that lead to better decisions and strategic business moves. On-site parking is available. Registration is scheduled for 7:15 to 7:30 a.m., followed by breakfast and Perlot’s presentation from 7:30 to 9 p.m. RSVP by Tuesday, May 2 at businesswest.com/lecture-series.

Run for River Valley

May 20: River Valley Counseling Center (RVCC), an affiliate of Holyoke Medical Center and member of Valley Health Systems, will hold its sixth annual Run for River Valley fund-raiser on Saturday, May 20. Funds raised will support RVCC in providing critical behavioral-health and other supportive services to individuals, families, and groups throughout the Pioneer Valley. The 5K run and 1.5-mile walk will take place at Ashley Reservoir in Holyoke. Registration starts at 8 a.m. at Elks Lodge 902, 250 Whitney Ave., and the race begins at 9:30 a.m. An awards ceremony will be held at the Elks Lodge following the race. The registration fee is $25 ($10 for children 12 and under). Adults who pre-register will save $5, and the first 100 registrants will receive a free race T-shirt. To register online, visit accuspec-racing.com or download a registration form at rvcc-inc.org. The deadline for mail-in registration is Saturday, May 13, with online registration accepted until Wednesday, May 17. Sponsors of the 2017 Run for River Valley include PeoplesBank, Palmer Paving Corp., Holyoke Gas and Electric, Hamel’s Catering, Laurel Pure, and Gallagher Real Estate. For additional information, visit www.rvcc-inc.org or contact Angela Callahan at (413) 841-3546 or [email protected].

40 Under Forty

June 22: The 11th annual 40 Under Forty award program, staged by BusinessWest, will be held at the Log Cabin Banquet & Meeting House in Holyoke, honoring 40 of the region’s rising stars under 40 years old. An independent panel of judges has chosen the winners, and their stories are told in the pages of this issue. The event is sponsored by Northwestern Mutual (presenting sponsor), PeoplesBank (presenting sponsor), Moriarty & Primack, Health New England, the Gaudreau Group, the Isenberg School of Management at UMass Amherst, Six-Point Creative Works, Renew.Calm, and the Young Professional Society of Greater Springfield. Tickets cost $75. A limited number of tables are available, and some individual and standing-room-only tickets are also available, but are expected to sell out quickly. To purchase tickets, call (413) 781-8600 or go HERE.

Daily News

HOLYOKE — The stock market is up, and soon, so might be interest rates. The Trump administration wants to make historic budget cuts, and unemployment rates are at historic lows. While these are much better than the worst of times for local businesses, are they going to turn into the best of times?

Business leaders, who do not like uncertainty, will get some insights into the economic future at the PeoplesBank Economic Outlook, a free luncheon featuring James Hartley, professor of Economics at Mount Holyoke College. The luncheon is slated for Thursday, April 20 from noon to 1:30 p.m. at Willits-Hallowell Conference Center, Mount Holyoke College, 50 College St., South Hadley. It is open to the public, but space is limited, and registration is required.

“The economy is improving, and business owners want to know where it is going,” said David Thibault, first vice president, Cash Management at PeoplesBank, who will introduce Hartley. “At this luncheon, we hope to give them some of the data necessary to help with business planning for this year and next.”

Registration information can be found at bit.ly/pb-register.

Daily News

HOLYOKE — The stock market is up, and soon, so might be interest rates. The Trump administration wants to make historic budget cuts, and unemployment rates are at historic lows. While these are much better than the worst of times for local businesses, are they going to turn into the best of times?

Business leaders, who do not like uncertainty, will get some insights into the economic future at the PeoplesBank Economic Outlook, a free luncheon featuring James Hartley, professor of Economics at Mount Holyoke College. The luncheon is slated for Thursday, April 20 from noon to 1:30 p.m. at Willits-Hallowell Conference Center, Mount Holyoke College, 50 College St., South Hadley. It is open to the public, but space is limited, and registration is required.

“The economy is improving, and business owners want to know where it is going,” said David Thibault, first vice president, Cash Management at PeoplesBank, who will introduce Hartley. “At this luncheon, we hope to give them some of the data necessary to help with business planning for this year and next.”

Registration information can be found at bit.ly/pb-register.

Opinion

Editorial

Over the years, BusinessWest has worn out the ‘question-mark’ key when writing stories and headlines for its Economic Outlook sections each December.

Any why not? No one really knows what lies ahead, especially when it comes to the economy. And over the past 15-20 years, there have been some times — such as the months after 9/11 and the very darkest days of the Great Recession in the fall of 2008 — when trying to speculate what might come next was all but impossible.

This isn’t exactly one of those times, but it’s close, and all because of history. Actually, two kinds of it.

First, that election about a month or so ago, because it ushered in a presidency seemingly defined by unpredictability and speculation — about what will happen domestically and abroad. And second, the nation’s economic track record.

Indeed, not once in the full history of this country has it gone more than 10 years without a recession. Don’t look now, but that means, sad to say, that we’re just about due for one. And if it comes soon — we’ve had almost nine years of mostly unspectacular growth — we’ll likely be entering it without the two most common methods of fighting one: lowering interest rates (because they’re already at historic lows and just can’t get any lower) and tax cuts (especially if President Trump makes good on his pledge to almost immediately lower them after getting sworn in).

But we’re getting ahead of ourselves. Sort of.

While it might be time to talk about that recession seemingly certain to come some time in Trump’s first term, the immediate future seems worthy of something else that gets typed often when writing about the year ahead — that phrase ‘cautious optimism.’

That’s especially true of the Western Mass. region, which, while it continues to lag maddeningly well behind most of the rest of the state in terms of growth and prosperity, is, for the most part, riding on an arrow pointed upward. Here are some reasons for the optimism:

• Springfield’s continuing climb. Last issue, we wrote about cranes and their uplifting abilities, no pun intended. It’s not hyperbole. Cranes do generate optimism and, well, more cranes. But it’s not just those machines at the casino site generating positive energy. It’s everything from new vibrancy downtown to the Thunderbirds; from Union Station to subway-car manufacturing. Springfield still has considerable work to do, but it is in what we believe are the early stages of a renaissance, which means there is more progress to come, and it will likely have a strong ripple effect throughout the region.

• Progress in other communities. As we’re written before, the process of reinventing a city — moving from a manufacturing hub to the proverbial ‘something else’ — is slow and often difficult. But many cities in this region, including Holyoke, Easthampton, Pittsfield, and Westfield, are making substantial progress in that regard, becoming centers for entrepreneurship, the arts, small business, tourism, and combinations of all of the above. This progress bodes well for the region, and it should continue in the year ahead.

• Promoting entrepreneurship. One of the most encouraging developments in this region in recent years, as we’ve noted, has been the efforts to not only promote and encourage entrepreneurship, but to create a population of smarter, more resilient entrepreneurs. Springfield has become the hub of this activity, but it’s happening region-wide. And while the landscape won’t change overnight, certainly, a stronger, more diverse economy will result.

• Eds and meds. Or is it meds and eds? While the region continues to diversify its economy, these two stalwarts continue to grow and become ever-more pivotal forces in overall economic development. Healthcare continues to be an ultra-steady source of jobs, and the region’s higher-ed institutions, led by UMass Amherst, are developing new degree programs and initiatives aimed at providing area businesses with their most important asset — qualified talent. These sectors are not only strong, but getting stronger, and the region will benefit accordingly.

While there are still many question marks regarding the economy and which way it will go in the year ahead, there are seemingly fewer of them. And this is a byproduct of the optimism (OK, guarded optimism) that is growing in intensity and bound to generate more progress in the year to come.