Obama visit to put economy in spotlight
St. Louis Globe-Democrat
April 23, 2010
by Lisa Watson
While President Obama will be visiting Missouri on Wednesday, April 28, to talk about the economy, a recent report says the St. Louis region is lagging behind the rest of the country.
The White House said Obama will meet with farmers, small business owners and local leaders in Macon, Mo., and Quincy, Ill. to share ideas for growing the economy.
In March, the economy improved in all areas of the country - except for the St. Louis district - according to the Federal Reserve's April Beige Book survey.
Revisions to economic data in March changed the view of how St. Louis fared throughout the recession, said Howard Wall, vice president and regional economics adviser at the Federal Reserve Bank of St. Louis.
"Before the revisions it looked like St. Louis was doing better than the country overall, and after the revisions, it looks like we're doing pretty much as bad as the country overall," he said.
Education and health care are two areas of the economy that are performing well, and the hospitality industry has been reasonably strong, economic experts agree. The manufacturing industry, on the other hand, is faring poorly both in St. Louis and around the country.
St. Louis came into the recession a little later than many other areas, which is probably one reason the recovery is lagging behind, Wall said. If the St. Louis is following a similar pattern to the country overall, then things could start looking up in a couple of months, he said.
Denny Coleman, the president and CEO of the St. Louis County Economic Council, agrees. The housing market is showing a significant uptick, he said, and the number of businesses looking for new buildings to expand has gone up 81 percent in St. Louis County compared to the same time period in 2009.
Those are indications that the job market is ready to pick up as well, he said. Once that happens, a well-educated workforce will help determine how strong the recovery becomes.
"There is significant number of people using this downturn in the economy to hone up their skills and the education, so that as economy bounces back they're trained in growth industries," Coleman said.
The mayor's office is hoping that Obama will address concrete opportunities for growth during his visit to the state, said Kara Bowlin, press secretary to St. Louis Mayor Francis Slay.
"An economic issue in which the city and outstate Missouri share an important and urgent interest is the export of agricultural products, especially beef and pork, through the proposed China trade hub in St. Louis," she said. "If we can find the things the Chinese want to buy, the trade hub, which could mean thousands of jobs and major new investment here, will open sooner."
There are a lot of things that could keep the turnaround from picking up steam, however. Wall said policies that make it harder for businesses to start up or expand could be a major obstacle.
"It would be a really bad time to impose really strong environmental regulations, for example, whether it's a good policy or not," Wall said.
The recently passed health care bill might be another impediment to recovery, he said. An unsustainable deficit, coupled with increased government spending, add up to projected increases in taxes - and that's detrimental to business, Wall said.
Lack of consistent regulations throughout St. Louis County could hold back small and midsized companies as well, said Juli Niemann, a financial analyst for Smith, Moore and Company. Each of the 94 suburbs of St. Louis has its own business regulations, which makes it difficult for companies that are trying to relocate or expand.
"If we had one uniform standard operating procedure, and one office to go to, that would streamline things immeasurably for businesses," she said.
Niemann believes small and midsized businesses are going to be the "life's blood" for the St. Louis region in coming years.
"Right now I've talked to a lot of small businesses: They have opportunities to expand, but they can't get loans," Niemann said.
Credit is starting to become more readily available, however, and that's a good sign for the recovery, Coleman said.
"I think there's a lot of interest in new business startups, which we typically see in these downturns, and the ideas that are spawned by people wanting to take their economic future in their own hands really can be quite productive, not only for them but for the entire region," Coleman said.
As for the region's long-term outlook, economic growth in St. Louis will depend on an educated workforce, Wall said.
"Often, economic development specialists focus on the wrong things to promote growth," he said. Steps such as cutting taxes aren't enough to build a vital economy, he said.
"The areas where we have no job growth are the same areas where high school attainment is very low," Wall said. "Until that gets solved, the other stuff is Band Aids, as far as I can tell."
