WisBusiness: Madison-area economy will continue to recover, panel says

By Brian E. Clark

For WisBusiness.com

The regional Madison economy will continue to rebound through 2010, but there may bumps in the road to a full recovery, a panel of experts said Tuesday night at Edgewood College.

“I’m optimistic about the future,” said Scott Lockard, president of U.S. Bank, Madison. “Our area has come through this bad stretch pretty well, compared to many other places.

“But this is the weakest I’ve seen the Madison economy and we are still facing significant headwinds, the biggest of which are state budget issues. And that all means there will be only slow to moderate growth.”

Lockard was joined on the panel by Londa Dewey, president of QTI; Eric Schwartz, president of Sara Investment Properties; and David Wittwer, president of TDS. The discussion, part of the Smith & Gesteland MBA Executive Speak Series, was moderated by Edgewood economics professor Bill Duddleston.

Dewey, who runs a human resources company was also upbeat on the future of the local economy.

“But it’s going to take awhile to shake the recession hangover,” said Dewey, who warned that many jobs that were lost during this recession may be gone permanently.

She also said wage increases will be small as the economy improves, disappointing a workforce that has been hammered by the economic downturn.

She said as companies cut staff and increased the load for remaining employees, positive feelings about their workplaces suffered.

On the upside, Dewey said a recent survey showed that 30 percent of Dane County businesses plan to expand in 2010 and she said the recruiting side of her company is much busier than it was at this time last year.

She warned MBA graduate students in the audience, however, that many Baby Boomers in their late 50s or early 60s may be putting off their plans to retire for as much as a decade.

When they do leave, however, she said there will be a big void to fill. So she urged them to hone their skills in the marketplace until then.

Wittwer, the TDS head, said start-up technology companies have suffered during the recession because they had a hard time finding investors to back them.

“Really good ideas just didn’t get backed,” he said.

And he opined that while increased savings will be good for the economy over the long term, the economy will not gain real steam until consumers start spending again.

Wittwer also said the conservative, well-funded companies will be in the driver’s seat as things improve.

“But the economy won’t roar back in 2010,” he said. “It will get better, but some firms will still struggle.”

Schwartz, whose company controls 45 buildings and has 127 tenants, predicted that it may not be until 2013 that commercial building takes off again in this area because of overbuilding.

He said many smaller contractors are in such bad shape that they are called “dead men walking.” Major contractors who are doing large public projects are in better shape, however, he noted.

Though times are tough, he said now may be an excellent time to buy a business because owners may want to get out and prices are down.

In addition, all the panelists agreed that the high-speed rail system that will soon link Madison and Milwaukee will be a boon to the regional economy because of the construction jobs it will bring.

“We need to think what this area will look like in the future, 10 to 15 years down the road. I think high-speed rail will be another reason why people want to live here,” Lockard said.