May 2, 2013
We spoke with Mark Vitner, Senior Economist, Managing Director at Wells Fargo about commercial and residential construction coming back, a significant finding from the 2013 Wells Fargo Small Business Quarterly Index. Watch the interview here.
Bob Coleman: Wells Fargo issued their small business index yesterday. It looks like small business entrepreneurs are not too happy about the outlook in terms of the economy but they are satisfied with their own individual performance.
Mark Vitner: That’s pretty much what we are seeing. We have been doing this for about a dozen years. We contract out with the Gallup organization to survey 800 businesses for a quarterly survey and we ask them how things are going with their business.
How are they doing today and what they expect in the future. There is a lot of anxiety about the future but when we ask folks about how their business is doing today, most of them say things are a little bit better.
Bob Coleman: Why is that Mark?
Mark Vitner: There is so much uncertainty in the economy right now, and so much of what is uncertain is bad. We’ve got this huge deficit, we’ve got the sequester, we’ve got taxes going up every which way, new regulation, you don’t know what the impact of health care reform is going to be, but you know it’s not going to help your bottom line.
This big cloud that is hanging over a business makes them reluctant to hire to expand their operations or borrow money. But when it comes down to what has actually happened, things are a little bit better.
Bob Coleman: Mark, I know you are paid big bucks to predict the future, where are we going from here?
Mark Vitner: Well I think things are going to stay in this slow growth mode that we’ve been in. I really don’t see much change. There hasn’t been anything that would prompt much of a change. The economy has been growing at a 2% pace for the last four years, and I think we are going to stay on that slow growth track but things are going to get a little bit better because construction is coming back. Both residential and commercial construction is coming back and that helps an awful lot of people.
Until we remove this uncertainty, we don’t have to get rid of the budget deficit, but we at least have to have some sort of a plan to stop the explosive growth of the deficit and get us on a trajectory where we are living within our means and I don’t see that happening in the next couple of years. I don’t think we are going to break free of the growth rate in the last couple of years.
Bob Coleman: Mark Vitner, Wells Fargo, Thank You
Mark Vitner: Thank You Bob.