Area business gurus predict economy for 2005

A solid year, but not a stellar one.

That's the conventional wisdom of some local business leaders who were asked to make predictions for 2005.

They feel bullish on Southeast Missouri but hold reservations on the national front. Locally, there was much optimism that Republican governor-elect Matt Blunt would improve Missouri's abysmal business climate and hope that the legislature would address tort reform.

The medical and retail centers will get stronger, they say, but rising interest rates, high energy prices and the ongoing war in Iraq are causes for concern.

Along with speculating on the future of business, our fearless leaders -- at our request -- prognosticated a Cubs World Series win (yeah, right), downtown golf courses and the capture of Osama bin Laden.

* Tim Arbeiter, executive director of Old Town Cape: It is my belief that Cape Girardeau's economy will continue to grow at a brisk pace. My prediction is based upon the new construction projects underway, thanks to some of our major economic institutions such as our federal and state governments, the university and the hospitals.

An even bigger boost to our economy will come from private sector investment. Some prime examples of private commitment include the new hotels being built, housing developments popping up around town designed for low- to high-income housing and new retail stores being constructed.

In the Old Town Cape district, we anticipate numerous inquiries about new retail, commercial and residential possibilities. These new developments will result in more local jobs created and more local dollars circulated in Cape Girardeau.

Also, I predict squirrels will find a new home instead of the electrical substations.

* Steven Bjelich, president of Saint Francis Medical Center: Throughout Southeast Missouri we are facing a critical shortage of cardiologists. Many factors contribute to the growing demand for cardiology services including an aging, more informed patient population; education programs that inform women about their risk of heart disease and encourage early intervention when heart attack symptoms are present; and an explosion of technology that offers better outcomes and less-invasive means of treating heart disease.

The wellness trend in the United States will continue as Americans become proactive in improving their health and employers see the cost benefit of employer-sponsored wellness incentive programs.

A prediction for 2005 -- the Cubs will play in the World Series.

* Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University: Like the national economy, economic growth in Southeast Missouri will slow slightly in 2005, but the economy should still experience a solid year. Employment will increase in the 1.5 percent range, which is similar to the national forecast of 1.7 percent. By the end of the year, the unemployment rate will be at 5.4 percent, virtually the same as for the nation.

Personal income in Southeast Missouri will grow by about 4.5 percent in 2005, a respectable figure. This bodes well for the region as personal income is perhaps the best regional measure of economic welfare. Retail sales, which depend primarily on population and personal income, should continue to recover in the new year. Growth in retail sales in the 3.5 percent to 4 percent range seems likely.

Generally, the region's economy should track the national economy fairly closely as it historically has done. The only potential dark clouds on the horizon are the large federal government and international trade deficits. As these put continuing downward pressure on the value of the dollar, the Federal Reserve may be forced to raise interest rates to protect the dollar's value. Any significant increases in rates could have a dampening effect on economic growth.

My final prediction is that long-suffering Cubs fans, of which I am one, will finally be rewarded with a World Series appearance by their beloved team.

* Steve Green, president of First Community Bank: The outlook for the U.S. economy is modest but healthy growth, with little inflation and some slight increases in interest rates, with the primary concerns being the low household savings rate, the large amount of consumer debt, the trade deficit with a weakening dollar.

The economic outlook for the Cape Girardeau area for 2005 should be another solid year, with this area not being reliant on one particular industry for its economic viability, which helps to insulate it from the true swings economically that you can sometimes see in other parts of the country. There is always the wild card in the Middle East that can have strong and direct economic impact.

After seeing the banking business lead the way, the city of Cape will now start to look at requiring all businesses to have the word "first" in their name.

* Marsha Haskell, regional director of external affairs for SBC: Our elected officials have vision and leadership that will guide this region and state in three key segments -- economic development, education and technology advancement. We will continue to attract new business ventures based upon access to an excellent work force, exceptional educational resources, proper infrastructure and outstanding health care.

The rebirth of the historic downtown Cape Girardeau area and River Campus will attract visitors throughout the region and become a hub for the arts, entertainment and fine dining.

* Jay Knudtson, mayor of Cape Girardeau and local banker: Cape Girardeau's low unemployment will continue to be far below the national average due to our stable and diverse work force. In addition, I predict 2005 will include new expansions and the announcements of new industry that will call Cape Girardeau home. These developments, along with increased sales tax revenue and the celebrated openings of Sears Grand and Kohl's, will have a tremendous financial impact on the city coffers.

Improved relations with local developers, contractors and longtime Cape Girardeau businesses will allow for cohesive and undeniable synergies. These relationships when working in concert with the city and the community, will be a formula for success. This, along with the leadership and influence of Lt. Gov. Peter Kinder, state Sen. Jason Crowell and state Rep. Nathan Cooper, will set the stage for prosperity unlike anything that Cape Girardeau has ever experienced before.

In addition, I predict some real population growth within the city of Cape Girardeau, perhaps as great as 10 percent.

Also, the Cardinals win the World Series, Mike Martz is fired, the Blues resume playing hockey instead of games, SEMO Redhawks win, plans for Cape's Downtown Golf Course are officially abandoned in favor of a baseball/hockey complex (sorry, Joe), President Bush visits Cape Girardeau and stops at Esicar's, Osama bin Laden is located in the south of France, Cape Girardeau's flood maps are changed, and finally, "Who wants to be a Mayor?" overtakes "Desperate Housewives" as the highest-rated television show of the year.

* Dennis Marchi, manager, Schnucks: U.S. economic indicators have shown a positive growth for 2004. We have seen this trend in the past holidays when we had excellent sales growth. Especially with the snow we had during Christmas week. I notice the holiday shoppers upgraded their purchases to the higher-quality items more this year than in the past. On items such as turkeys and hams we sold more of the name-brand selection.

* Thomas M. Meyer, real estate agent: The general real estate market will change little in 2005. This is mainly because the area has just minor reflections of the country's boom or bust trends, is more conservative and adjusts up or down by a small percentage.

New construction will continue with a steady growth as before, both in Cape Girardeau and Jackson, as well as the out-county area. More recently, the growth has been in the county, with the attractions of mini-type farms or three to five area tracts of land. Most of the big-priced houses (33) on the market now are in Cape Girardeau, with prices of the 33 ranging from $300,000 to over $1 million. Jackson has 17 now on the market, also from $300,000 or higher.

Things will be even more exciting this year, with new building plans like the Spanish Court, some new offices and older buildings taking on new "old appearances." This will be the place to be in 2005.

A new Gordonville training camp for the St. Louis Cardinals will be announced and a French golf course will be discovered in downtown Cape Girardeau.

* Grace Parry, owner of Grace Cafe in Cape Girardeau: I'm optimistic about economic opportunity in Cape this next year. There are probably two things that I am most excited about: the changing cityscape and the community itself.

Old Town Cape has been talking about changes from its humble beginnings. We are seeing the fruits of that with our beautiful new bridge, outstanding murals that transform our floodwall into colorful tales of the past, the Marquette escaping the wrecking ball and becoming a glorious tribute to our future, the new federal building and the actuality of the River Campus, to name a few.

The university is taking strides in reshaping its look, redefining its opening statement to the community, and all of these are providing jobs in the process. Efforts are continuing along Broadway to beautify and preserve, accommodate traffic and look ahead. Progress is evident and will be a boost to our economy.

From a personal perspective, I have a much stronger belief in the loyal customer than I did three years ago. Our move from the riverfront to upper Broadway has strengthened my faith in the people of Cape Girardeau. The essence of community will fuel our future economy as we continue to support one another. No man or business is an island. It takes an entire village to raise a ... business.

* Mitch Robinson, Cape Girardeau County's industrial recruiter: With the election of Matt Blunt, we will have a new commitment to economic development within Missouri. He has already held an economic development summit meeting in Jefferson City. He is committed to making Missouri a more attractive location for business to grow and expand by making critical changes to many parts of Missouri laws and regulations.

Both the Missouri House and Senate are committed to making many of these changes possible. Many changes within Missouri Department of Economic Development will make it a more effective marketing arm of state government. Missouri must focus on keeping the industries we have and helping them to grow and add jobs. By doing that we will attract new companies to Missouri and to our region.

* James W. Wente, president, Southeast Missouri Hospital: This is an inauguration of historic proportions since it is the first time in nearly 80 years that a Republican Missouri Legislature has inaugurated a Republican governor. It is customary for a new administration and legislature to collaborate in their first year to aggressively pursue their agenda, which leads me to believe that quick, clear and decisive action on medical malpractice is likely.

For health-care professionals and providers this probably means new limits on noneconomic damages in professional liability cases and a reversal of a recent court decision that expanded the number of times the current limit on non-economic damages could be applied in a case.

I anticipate that the legislature may extend last year's moratorium placed on the construction of new specialty hospitals in Missouri and update the state's laws that govern patient safety and quality of care issues for outpatient health care providers.

With regard to the state's budget, it would appear that the state has exhausted its supply of one-time revenue streams to balance the budget. In addition, further cuts to education will not be popular. As a result, eligibility for certain Medicaid beneficiaries may have to be changed to resemble those of prior years to enable the legislature to pass a balanced budget. This may mean that coverage for the elderly and disabled will be reduced from 100 percent of the federal poverty level to something less.

smoyers@semissourian.com

335-6611, extension 137