How Far Can We Grow?

Is it getting boring hearing how well the economy is doing? Or is it just hard to believe this is normal now that we’ve gotten over the Great Recession? The Conference Board Leading Economic Index showed another great improvement this past month and strong enough to last through the rest of 2018.

It’s not time to let up yet and think there’s smooth sailing ahead, but it sure feels like it’s going to be a great holiday season after a productive 3rd Quarter!

Globally, 240,000 net new mouths to feed enter this world per day. With the speed at which we advance, and need to advance, you have to think growth and demand should last a bit....right? If demand stays strong then supply can be added appropriately and in a balanced manner. It’s when one outruns the other that a huge gap occurs in the economy.

Strong retailers and big brand names are seeing improved growth despite past assumptions that ecommerce is killing retailers.  Probably because they focused on technology improvements and improved consumer experience through multiple channels rather than believing the hype about Amazon taking over all channels.  There’s something to be said about being leading edge, as Amazon has been, and there’s something even more to be said about strong balance sheet companies like Target and Wal-Mart learning by observation and then deploying their resources to meet market demand the old fashioned way.

 

Now how do inflation and rate increases play out in the coming year?  Does the Fed raise rates before or after inflation creates real concern?  With as much consumer activity as currently appearing, corporate decision makers could start trying to increase profits drastically by raising their prices which in turn would cause inflationary pressure.  Does the Fed deter that by continuing consistent increases that keep corporate America from taking the chance at slipping in price increases along with interest rate increases or does the Fed wait one cycle too long, allowing hidden price increases while we’re not paying attention?  We watch the Fed regularly to see how rates move, but we don’t always watch as close to the products we buy.

The South seems to be carrying the weight of growth if you look at a well recognized indicator in the Architecture Billings Index, which slowed nationally in the summer yet growth is still occurring mostly from the southern United States.  We can definitely feel that growth here in Tampa Bay as we see construction cranes all throughout our downtowns, and we read great news about new developments in real estate, medical, technology and corporate relocations.  Those are the noticeable big ticket topics too.  If you mention the growth in the less recognizable areas such as consumer goods distribution and local transportation and shipping developments then you notice even more to get excited about. Just ask a local broker their opinion of what they’re seeing in their respective fields.

There are fundamental and structural changes to our area creating a new layer of foundational strength in Tampa Bay.  A layer that is harder to take away and the real reason some business leaders really get confident about our region, because they know what kind of growth comes after those structural changes.  When you’re leading the country in certain areas of growth, then a national slowdown doesn’t knock you off your potential, it just creates buying opportunities for the next up-market.

 

Call Fortress CRE, so we can talk expert advice on where your real estate strategy should be focused in West Central Florida.  Fortress Commercial Real Estate (CRE) adds value to business owners looking to grow through their real estate, office and building needs.


Visit www.Fortress-CRE.com and call or email me for more sound advice.


kostas@Fortress-CRE.com

813.444.3330

 

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