The presenters at the annual Northern Trust Economic Trends event Friday, presented by BizTimes Media, discussed their expectations for the economy and the manufacturing, health care and workforce development sectors this year.
The event’s speakers were Michael Knetter, an economist and president and CEO of the University of Wisconsin Foundation; Brian Kobylinski, Chief Executive Officer of Jason Industries Inc.; Nick Turkal, president and CEO of Aurora Health Care; and Becky Frankiewicz, president of ManpowerGroup North America.
Knetter, who served as an economic advisor to former presidents George H.W. Bush and Bill Clinton, kicked off the presentations with his annual macroeconomic outlook which, overall, indicated continued economic growth for the U.S. in 2018.
This upward momentum is largely due to the $1.5 trillion federal tax cut that President Trump and the Republicans passed at the end of last year, which Knetter said, will weigh heavily on the climate of the U.S. economy this year. A “business-friendly administration” in the White House, that seeks to deregulate corporations and businesses, also contributes to the expected growth.
“The reduction in corporate taxes, which is the center of this legislation, I think could have really positive benefits for the U.S. economy,” Knetter said. “That reform really makes sense and I think it will keep more production in the U.S., bring production back and bring income back into the country.”
Knetter predicts that the S&P 500 Index and real GDP will both see growth this year, with an increase of 8 percent for the former and 2.5 percent for the latter, but GDP momentum will taper by year’s end.
Although the value of the U.S. dollar decreased by 10 percent last year, Knetter said it is likely to remain stable in 2018 against sovereign currency.
Another positive trend the U.S. economy will continue to see this year is the rate of unemployment, which decreased in 2017 from 4.8 percent in January to a 17-year low of 4.1 percent in November and will hover around 4 percent in 2018, Knetter predicts.
But with an economy that is near full capacity, and even with a slight increase in labor force participation expected for this year, employers across the nation– 46 percent, to be exact– are in need of talent to grow, said Becky Frankiewicz, president of ManpowerGroup North America.
As technology rapidly evolves, especially in industries like manufacturing and health care, demands in talent and skills are shifting.
“The pace of change in technology is changing the way we do business and it’s changing the type of people we need working for us,” Frankiewicz said. “We are embarking upon the skills revolution, this dramatic change or gap between the haves and have-nots of skills– the people who can be successful in the future and those who are struggling to be successful in the digital age.”
Wisconsin’s businesses– especially its leaders– are currently faced with the task of “future-proofing” themselves by re-skilling and up-skilling for a digital renaissance. As a company, investing in existing talent is more realistic than searching for a new workforce in the current economy, Frankiewicz said.
“For companies, it’s time now to change from consumers of labor to creators of talent,” she said. And for the workforce, “the future is learnability and skills are the new currency.” A potential employee’s title does not mean as much as his or her ability to learn new skills.
Frankiewicz said global companies such as FoxConn Technology Group and Haribo, who last year both committed to opening manufacturing facilities in Wisconsin, will continue to invest in the state if the state can provide the needed skilled workforce.
Kobylinski referred to the technology evolution in manufacturing as “industry 4.0,” which will be “a synchronous approach to data from the customer through the supplier,” he said.
The future of manufacturing will have a positive impact on the economy, but some smaller manufacturing companies still have progress to make before reaching even the industry’s third stage, Kobylinski said.
By contrast, the health care industry has not changed as significantly in 50 years, Turkal said. Despite the industry’s technology, its workforce’s payment methods have slowed its growth, he said.
However, Aurora Healthcare’s recently announced plans to merge with Chicago-based Advocate Health Care means local health care will be more efficient and innovative as the companies investment in more people and have the ability to take more risks, he said.
Turkal also said he expects companies like Google and Amazon to aid in the improvement of the health care industry.
