The Middlesex Savings Bank Economic Forum
There is still room for economic growth before a potential recession, although how much growth and for how long will depend on several variables.
That was the major conclusion from a panel of economic, financial and real estate experts at the 18th Annual Economic Breakfast hosted by Middlesex Savings Bank, and moderated by Geri Denterlein, a former journalist and now the founder and CEO of her own PR and communications firm.
“We really don’t know what inning we are in,” said John Parsons, CEO of Parsons Commercial Group.
While the economy is in its ninth year of expansion, the panelists had different estimates of how much longer growth may last, although all admitted they couldn’t be sure.
Parsons said he thought there were at least two to three years left of growth, while Robert Hughes, a senior research fellow at the American Institute for Economic Research, said he felt “cautious optimism” about the economic climate, and did not foresee an imminent recession.
Ryan Kim, a partner at Castle Island Partners, said it’s hard to know where the top is, but that he thought the economy must reach its tipping point in three to five years.
Still, panelists noted that the rebound since the recession had been anything but normal.
Hughes said gross domestic product growth has been slower than in previous periods of expansion.
Chuck Zodda, a financial advisor with the The Armstrong Advisory Group and co-host of The Financial Exchange, said the policies that propelled the U.S. economy from the great recession have had “side effects.”
Zodda said these effects have not led to a good distribution of wealth, which has prevented the middle class from reaping the benefits they might expect to see in a typical recession.
“If you are not an asset owner, you have not done as well,” he said, adding that wages have not come back to what they were.
But there has been a lot to cheer about as of late, according to Parsons, who said people are paying up for new construction; multifamily and luxury real estate is still very desirable; banks are aggressively lending and there is a lot of foreign investment in Boston.
Hughes said the biggest variable right now is in Washington, where lawmakers are trying to pass tax reform, which could potentially push off recession a few extra years. Panelists also agreed that how infrastructure is handled will also have a monumental impact on the economy going forward.
While recession may not be imminent, Zodda urged people to be prepared in case another downturn comes sooner than expected – do not take on too much debt or invest too heavily in markets to try and get that extra profit, he said.
