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Wednesday, January 13, 2010

Philly Fed's Plosser sees GDP growth at 3-3.5% for 2010

For months, it’s been common to hear that businesses, especially small firms, were poised to take advantage of a turn in the economy.

As the weeks go by, it’s been apparent that while the economy may have turned, remaining poised is all many firms are doing.

Last night, Charles I. Plosser, president of Federal Reserve Bank of Philadelphia, spoke to a group of committed growth hounds: firms that have appeared on the Philadelphia 100 list of the fastest-growing privately held companies.

To make last year’s list, a company had to have revenue growth from 2006 to 2008 that exceeded 73 percent.

After paying homage to the assembled whose actions help the U.S. economy remain “vibrant and as productive as it can be,” Plosser proceeded to douse their hopes for a rapid recovery.

Plosser’s economic outlook for 2010 boiled down to gross domestic product growth of between 3 percent and 3.5 percent, elevated unemployment, muted consumer spending, and low inflation.

“Clearly, entrepreneurs have the ability to re-create the economy and generate jobs in all sectors of our economy,” he said. “Yet, even those with the hardiest entrepreneurial spirit might well have grown weary during the turmoil of the past two years.”

And how. He noted “anecdotal stories” of small businesses that have struggled to get loans. But when will credit conditions improve for small firms, which rely on banks for 90 percent of their financing needs?

“Credit, like unemployment rates, tends to be a lagging, not a leading, indicator of a recovery,” Plosser said.

In other words, the thaw isn’t coming soon.

New leader

Nearly two months after the sudden death of its founder, the Greater Philadelphia Senior Executive Group has chosen a new chairman.

Roy Hibberd, general counsel of Dollar Financial Corp. of Berwyn, succeeds Chris Pavlides, who’d built the networking organization from 20 members in 2002 to more than 1,000 now. Pavlides died in a single-car crash after suffering a heart attack.

Hibberd was one of those early adopters of the group, which believes networking is best done face-to-face.
Posted by Mike Armstrong @ 7:27 AM  Permalink | File Under: Small Business | Post a comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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