Mary Kelly, leadership expert, economist and author covered the current state of the economy and what to expect at the LANDSCAPES 2017 CEO Forum.
At the event, hosted by the National Association of Landscape Professionals and sponsored by Caterpillar, Kelly said the economy is doing “okay.” Inflation is low, healthcare costs are up and the stock market is doing well, she said in her update.
“Inflation is very low so the good news for you is that the prices for what you need to run your business are low,” she said.
It’s also harder than ever to find workers. Nine years ago, seven people applied for each open job. Now, that number is 1.2.
Multiple studies predict that at least 40 percent of the workforce will be freelancers in the next few years, Kelly said. “With the vast mobility of jobs right now it’s hard for people to think about showing up to the same job every day.”
On average, people change jobs every 4.6 years. That number for Millennials is even lower at 2.1 years.
“Gone are the day when you sign up with one company and stay there for 30, 40 years are gone. They’re just gone,” Kelly said.
She also gave ideas for where to invest in 2017: virtual reality, video games, elderly/older care healthcare services, physical therapy, translation and interpretation, biotechnology, VOIP, drones, green energy, water and water treatment
Here are a few more takeaways from the forum:
• “There’s a difference between making more revenue and making more profit and a lot of people don’t understand that,” she said. “You don’t necessarily need to make more money; you need to make more profit.”
• Healthcare costs are up 5.6 percent from last year and it will keep going up.
• The stock market is doing well. “If you have invested you should be feeling very, very cheerful about your investments,” she said.
• Interest rates are going to go up, so buy a house now if you want to by one.
• Existing home sales were best in a decade
• The median home price in the U.S. is up 3.1 percent and the median listing price is $254,000, while the median rent is $1,600/month. “People are paying more for rent and getting less,” Kelly said.
• Wages are low and flat, and “because of this our employees have opted for looking at different things,” Kelly said. “In a tight job market, you would expect wages to increase but that’s not happening.”
• Labor productivity growth is poor. “Look at your teams to see where your productivity is getting held up,” she said.
• “People are spending like there’s no tomorrow,” Kelly said. People are buying a lot of large, durable goods but they’re financing them. “It’s not just our young people who want instant gratification,” she added.
• The average cost of employer-offered family plan in 2017 is u$18,764, up 3 percent from last year
• Credit card debt has sky rocketed in the last couple of years,” Kelly said. And Americans have the highest credit card debt in U.S. history. There’s also an increase in defaulting. “How does this affect you? When you get a credit card, it might not be so great,” Kelly said.