The head economist for JP Morgan Chase’s commercial banking unit is confident that the national economy is recovering, even though the pace may not feel like it.
“I think you can make a pretty good case of an economic recovery,” said James Glassman. “(But) we’re in the bottom of the fourth inning. We’ve got a ways to go.”
Glassman’s remarks came as part of Wichita State University’s Wichita Area Economic Outlook Conference Thursday at Century II, a four-hour event attended by more than 600 people.
At the conference, WSU’s Center for Economic Development and Business Research, which puts together the annual jobs forecast, said it expects the area to add 4,900 new jobs in 2013, with the biggest bump in hiring projected for business services, a broad category that includes everything from janitors to research scientists.
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Glassman, who spoke for about 30 minutes, told the audience that there were a number of factors behind the seemingly sluggish recovery nationally.
“Part of what we’re feeling right now is the unwinding of the fiscal stimulus,” he said, referring to a number of initiatives put in place by the Obama administration aimed at jump-starting the recovery.
Glassman said the European Union, which has undergone a series of painful economic reforms over the past couple of years, “will slowly pick up steam again” and aid in the U.S. recovery.
House prices and household income are now in line with each other, and home builders have “under built” for a couple of years, Glassman said, which has allowed an oversupply of new homes to be absorbed.
“That’s why you’re beginning to see some signs of life,” he said.
And manufacturing in the U.S. “has the wind at its back,” Glassman said, and has created about half a million jobs since the recession.
“It’s time to think the tide is coming in … but it’s going to be a while before high tide,” he said.
Attendees also heard presentations from Westar Energy CEO Mark Ruelle and John Dieker, vice president of strategic projects for Bombardier Learjet.
Power on demand
Ruelle said his Topeka-based electric utility has to continue to deliver available, reliable and affordable power, no matter the economic conditions, and even if a recession causes its revenue to go down because of less consumption.
He said the sources of fuel on which Westar relies help guard against dramatic price fluctuations that are still down the road and hard to predict, but at the same time the utility is trying to provide customers with the most affordable energy.
He said the company has deepened its investment in wind generation, but wind energy will remain only one of several sources the company uses to generate electricity for its customers. That’s largely because of price and because wind is not a source that can be counted on continuously.
“It’s no substitute for a power plant,” Ruelle said.
Learjet’s Dieker said the short-term forecast for the business jet market remains uncertain. To underscore that uncertainty, Dieker held out a Magic Eight Ball and asked it when an uptick in aviation would begin. “Not sure,” he said to the audience of the ball’s answer.
“It is a difficult question to answer,” Dieker said. He said year-to-date, Bombardier has seen an increase in deliveries for light aircraft, which includes Learjets, from 88 in 2011 to 101 in 2012. Utilization is higher and the amount of used inventory has been declining.
Longer-term, through 2031, the global market for business jets looks stronger, he said.
“We’re concerned about the immediate future (but) the longer term future for this industry is strong,” Dieker said.
Doug Hensler, dean of WSU’s W. Frank Barton School of Business, said the turnout for this year’s conference, in its 33rd year, was a record.