While economic issues such as the cost of healthcare, taxes and the availability of credit have dominated headlines recently, Boston-area businesses’ biggest concerns are somewhat more basic – namely, attracting and retaining customers.
But, local businesses are not quite ready to go on a hiring spree or spend a lot of cash to battle competitors, according to a survey of attendees at a Sovereign Bank economic outlook event this morning.
The event, co-sponsored by the Greater Boston Chamber of Commerce, invited the chamber members in attendance to submit answers to pressing economic questions via electronic survey. A panel of local businessmen, including Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University, and Greg Pinto, chief investment officer of Baystate Wealth Management, weighed in with their own ideas on Massachusetts’ economic future.
On the overall economy, respondents -representing a cross-section of local industries – generally said they believed 2011 would be a moderate improvement on 2010. While the Greater Boston Chamber of Commerce CEO and President Paul Guzzi asked questions of the crowd, audience members punched in responses electronically and immediately saw their answers projected.
About 30 percent believed "attracting new customers" was their greatest challenge over the next two years, while nearly 20 percent included "retaining existing customers" in their response. Health insurance concerns came in at 15 percent. Higher taxes were only a concern for 4 percent of respondents, while obtaining credit was a worry for only 5 percent.
Roughly half of respondents expected to have "slight" increases in hiring and spending over 2011, and about 30 percent predicted no change in either category.
That cautious optimism pervaded attendees’ responses regarding the overall economy as well.
About 60 percent of the audience thought the Greater Boston economy would be "somewhat better" over the next 12 months, while nearly 30 percent predicted no improvement. However, they were more optimistic about their own companies: 26 percent thought their companies would be in "much better shape" over the next 12 months, with 42 percent opting for "somewhat better" and about 30 percent sticking with "about the same."
"My perspective is reflected very much in your perspective," Bluestone commented, seeing the results. "There was one word that came up over and over again – ‘slight.’"
Bluestone and his fellow panelists believed 2011 would be a year of moderate recovery, but acknowledged that many unknowns could hurt the economy, such as oil prices or inflation.
Although Pinto said he saw a renewed sense of optimism among investors and consumers at home, international upheaval was still cause for concern: "The red flags at this point are pretty much overseas, with China trying to put the brakes on its growth and debt issues in Europe."
Still, the majority of the discussion focused around the economic strength and weaknesses of the Greater Boston area, with attendees concerned about the overall cost of living. When asked about the top challenges facing the region, 20 percent put cost of living at the top of the list, followed by health care (19 percent) and real estate (10 percent).
