Breaking News Bar
updated: 1/19/2018 6:58 AM

Local business leaders share predictions, thoughts about 2018

Local business leaders share predictions, thoughts for 2018

hello
Success - Article sent! close


  • Scott Swanson

    Scott Swanson

  • Nicole Wolter

    Nicole Wolter

  • Eric Lundstrom

    Eric Lundstrom

  • Keith Kinsey

    Keith Kinsey

  • Tim Hennelly

    Tim Hennelly

  • Alex Bratton

    Alex Bratton

  • Jack Ablin

    Jack Ablin

  • Brian Burke

    Brian Burke

  • George LeClaire/gleclaire@dailyherald.comBrian Burke, President, CEO, and one of the founders of Links Technology Solutions in Schaumburg on Thursday, January 17, 2013.

    George LeClaire/gleclaire@dailyherald.comBrian Burke, President, CEO, and one of the founders of Links Technology Solutions in Schaumburg on Thursday, January 17, 2013.

 
 

We experienced a superheated stock market and a steadily growing economy with low unemployment and low inflation in 2017. Can we expect to see the same momentum in 2018?

There are many unknowns, such as whether the lower federal tax rates that businesses will enjoy will produce more jobs and investment. Some say the changes could accelerate business spending, while critics worry companies will hoard the savings to bolster bottom lines.

As we start a new year, we asked local business leaders for their thoughts. Many expressed concern with the workforce and jobs. Labor availability is a big worry in the suburbs as it is across the country.

"It's a challenge today to find good people," said Eric Lundstrom, president of Focus Capital Advisors Inc. in Downers Grove.

We asked local business owners several questions -- from their overall concerns at the start of the new year to tips they would give young workers entering the business world. And if you're looking for some further business knowledge, the local leaders share their favorite business books.

The leaders share their thoughts on everything from the Federal Reserve and the tax laws to if you should put ketchup on your Portillo's hot dog and a prediction on if the Cubs will win the World Series.

Scott Swanson

Illinois Regional President at PNC Bank, Chicagoland area

Q: What is one issue you are concerned with heading into 2018?

A: Our economists are concerned about the Federal Reserve and monetary policy in 2018. The Fed has a difficult job; the labor market is very tight, but inflation is low, so the path forward isn't clear. Should the Fed raise rates quickly to ward off potential inflationary pressures from the job market, or be more cautious given that inflation is well below the Fed's 2 percent goal, and in fact moved further away from that goal in 2017? In addition, you have a new chair (Jerome Powell), new members of the Fed Board of Governors, and you will have a new president of the New York Fed (Bill Dudley is retiring). In addition, the yield curve is narrowing -- short-term interest rates are rising more quickly than long-term rates. A narrowing yield curve often signals a recession is coming. I don't think a recession will happen in 2018, but the potential is there.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: I think the tax bill will provide a boost to near-term economic growth and we've already observed a number of companies announce they'll be sharing the soon-to-be realized benefits with their employees. However, the long-term implications are less certain. The bill also did little to simplify the tax code and, in some ways, made it more complicated -- a missed opportunity.

Q: How will the hike in federal interest rates affect business growth?

A: Interest rate increases will have a modest negative impact on growth, but should not push the economy into recession. Although interest rates are rising, they remain very low on an historical basis. In addition, tax cuts will offset the drag from higher rates in 2018.

Q: How do you think the labor market will look in the upcoming year?

A: The labor market will continue to improve, although job growth will slow. Job growth, which was about 170,000 per month in 2017 in the country, will soften to around 145,000 per month in 2018. That will come not because of weaker demand from businesses for workers, but from more difficulty in finding workers as the job market continues to tighten. The unemployment rate (4.1 percent in November) will continue to gradually decline, moving below 4 percent by the end of 2018. The best news for workers is that wage growth will be stronger in 2018 as the tight labor market forces businesses to raise pay.

Q: What will restrictions on immigration do to the economy?

A: Immigrants are an important source of economic growth in the United States. They provide labor at a time when the job market is getting tighter. In addition, immigrants support entrepreneurship and technological innovation. I'm concerned that restrictions on immigration could be a significant weight on long-run economic growth in the U.S.

n n n

Nicole Wolter

President, HM Manufacturing, Wauconda

Q: What is one issue you are concerned with heading into 2018?

A: One of my biggest concerns for 2018, that seems to be a consistent theme, is workforce development.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: Be patient, be focused, be willing to wear multiple hats and get ready to work! Those things do not go unnoticed.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: For the larger corporations it will be a bigger benefit for them but for small to midsize companies, especially for manufacturing, it's a nice relief. It will further advance growth, employee opportunities and the ability to invest in new machinery.

Q: One business book you would recommend?

A: "The Goal" by Eliyahu Goldratt and Jeff Cox and my other favorite that's booked marked everywhere, "Business Adventures" by John Brooks

Q: How will the hike in federal interest rates affect business growth?

A: As interest rates rise, it will pull business owners back from purchasing and expanding. Costs will rise, particularly in overhead and wages. What to be concerned about is the unemployment rate pushing below the "natural rate"/too low and the percentage of inflation that will rise in accordance to that.

Q: How do you think the labor market will look in the upcoming year?

A: I believe the labor market will tighten. With job growth being strong and more openings, it will be harder to find skilled and qualified help. That ultimately will force businesses to increase pay to keep workers and could start a poaching scenario. This is a major concern for the manufacturing sector that already is hurting for skilled machinists and employees. Companies would have to relax hiring requirements and showcase more on-the-job training in hopes that there would be employee retention after.

n n n

Eric Lundstrom

President, Focus Capital Advisors Inc., Downers Grove

Q: What is one issue you are concerned with heading into 2018?

A: The confusion about the impact the new tax law will have on the Chicago area business owners we serve may lead to a delay in making important decisions related to the transition of their businesses. None of us like paying taxes but we like it even less when the outcome is not clear.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: Find a job doing just about anything where you can learn how to communicate with customers and clients and understand how to solve problems. The first job is a learning experience so get out and start learning from co-workers, supervisors and bosses rather than looking for the perfect fit.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: It will help bigger companies compete on a global stage and keep jobs in the USA. That should lead to further gains in the stock market. Most of the local business owners will adapt while some will pay more and some less. Illinois is one of states where family business owners may pay more in federal tax.

Q: One business book you would recommend?

A: "The Revenue Growth Habit" by Alex Goldfayn outlines the simple art of growing your business. Excellent practical ideas.

Q: How will the hike in federal interest rates affect business growth?

A: Rates are still very low so as long as the lending community is willing to lend, business owners will not be deterred by the rate increases.

Q: How do you think the labor market will look in the upcoming year?

A: It's a challenge today to find good people, especially in sales. It will remain a challenge throughout 2018 so business owners should invest more time and money in training and developing younger workers.

Q: One last thought?

A: The challenges facing Illinois to get out from under its past due bills will continue to have a negative impact on the business community. Businesses that do business with Illinois governmental units, towns, counties, schools, etc. all suffer if they cannot get paid. And gridlock in Springfield may actually get worse before it gets better and many a small business will suffer or fail.

n n n

Keith Kinsey

CEO, Portillo's Hot Dogs, Oak Brook

Q: What is one issue you are concerned with heading into 2018?

A: We always try to hire great people to join our team. It becomes increasingly hard every year to hire the best team members and we think 2018 will be no exception. There is a lot of competition for talent.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: Learn the details of whatever industry you enter. If it's restaurants, make sure to learn the business at the operations level. Communicate and connect with people at all levels in business and your community. It does not matter what avenue you take in life, people play a huge role in it. But you can't be successful until you first understand what makes the business run and the nuances behind working with customers and team members every day.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: Our business decisions and future strategies are based on where we see the opportunity to grow the Portillo's brand. That involves understanding the market dynamics, community demographics, and site availability. Taxes are way down on the list for us.

Q: One business book you would recommend?

A: Two good ones I've read recently are "Give and Take" by Adam Grant, and "The Four Obsessions of an Extraordinary Executive" by Patrick Lencioni. But if you haven't read "Never Put Ketchup on a Hot Dog" by Bob Schwartz, you should stop what you're doing right now and read it.

Q: How will the hike in federal interest rates affect business growth?

A: Even with the increase in rates, borrowing costs are still attractive. Also, by increasing interest rates, the Fed is indicating that the overall health of our economy is strong. We have seen low unemployment rates and solid consumer spending, so we expect to continue to grow in this economy.

Q: How do you think the labor market will look in the upcoming year?

A: This is a very challenging labor market right now. We expect this trend to continue into 2018. As an organization, we rely heavily on our talented people, so nothing is more important to us than recruiting top talent, training them well, and retaining them over time. We feel our culture, future opportunities for career growth, and our environment give us an advantage over other concepts.

n n n

Jack Ablin

Executive vice president, BMO Wealth Management

Q: What is one issue you are concerned with heading into 2018?

A: One risk on the horizon is trade. President Donald Trump has been an outspoken critic of our current trade deals, promising to rip up NAFTA, for example. Anything that would spur a trade dispute with our trading partners poses a risk to the economic recovery and the markets.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: My advice to college grads is make sure you love what you do for a living, because you're going to be doing it for a long time. If you love what you do and you're good at it, the money with follow.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: The new tax plan gives a boost to U.S. businesses and sends a message to the rest of the world that America embraces business. It will be interesting to see how Europe and China react.

Q: One business book you would recommend?

A: I'm currently reading "Principles," by Ray Dalio. Ray is a super-successful hedge fund manager and businessman. His insights are both unique and interesting.

Q: How will the hike in federal interest rates affect business growth?

A: the Fed Funds rate is so low that raising it a percentage point probably won't have much impact. Historically, the overnight rate mirrors real GDP growth which right now is three percent. The overnight rate is currently 1.5 percent.

Q: How do you think the labor market will look in the upcoming year?

A: I wouldn't be surprised if the unemployment rate got into the threes this year. A three percent unemployment today isn't like a three percent unemployment rate of the 80s and 90s, now that so many working-age Americans are not in the workforce.

Q: Closing thoughts?

A: Two key indicators to watch this year, inflation and credit. A rise in inflation or a deterioration in credit conditions would signal the end of the remarkable rally we've enjoyed for the last several years. I don't expect either to be upset this year, however, but I'm watching.

n n n

Tim Hennelly

President, Great Lakes Region, Ryan Companies US Inc., Naperville

Q: What is one issue you are concerned with heading into 2018?

A: I'm worried about where we are in this cycle and how long until a slow down or correction. I'm confident that 2018 and even 2019 will be healthy but we need more confidence long-term when we evaluate our longer horizon projects.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: I would tell them -- don't think your "learning" phase is over now that college is done. Your real-world MBA just started and you have to study just as hard as you did in school. But now you'll be studying the real-world methods that your new employer uses, you'll need to focus on networking inside and outside your company and you'll have to become very aware of how current events affect you and your employer. Also, focus on improving your written and verbal communication skills; you'll rise above 95 percent of your co-workers.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: There are plenty of things I don't like about it -- but I do believe the corporate tax changes will help the economy. The main corporate change that will help is the new ability to expense capital improvements in the current year rather than depreciating them over longer time frames. This will help the construction business, certainly, but will also boost suppliers of all sorts.

Q: One business book you would recommend.

A: "Tap Dancing to Work" by Carol Loomis. It's a compilation of fortune magazine articles about Warren Buffett.

Q: How will the hike in federal interest rates affect business growth?

A: It's a good time to raise the Fed rate now since corporate earnings won't really be impacted with the tax change.

Plus, I think it's important that the Fed gets the rate up so they have the ability to lower it in the future in the case of a recession. Q: How do you think the labor market will look in the upcoming year?

A: Extraordinarily tight. We have full employment already (especially in the construction trades) and it can only get tighter if we have growth. Hopefully that leads to higher wages all down the line. We have to be ready for some inflation because everything will get a little more expensive.

Q: What question did I forget to ask?

A: Will the Cubs return again to the NLCS? A resounding yes!

n n n

Alex Bratton

CEO and Chief Geek, Lextech Global Services, Downers Grove

Q: What is one issue you are concerned with heading into 2018?

A: A key issue for us next year will be finding the best talent for our growing organization. We're adding leaders in many areas of the business and recruiting great talent is harder every year.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: Try to learn as much as you can in each job you have, find a mentor and invest in relationships with your co-workers (it's a smaller world every year and you will see many of them again outside this job).

Q: One business book you would recommend?

A: I highly recommend Simon Sinek's book, "Start With Why." A deep understanding of the purpose of an organization or even at a project level goes a long way to setting a path for success and keeps people from just going through the motions.

Q: How will the hike in federal interest rates affect business growth?

A: I don't see a significant business impact for us from interest rate changes or the changes to the tax law at this time. I am concerned about any tax law changes that make it harder for us to invest in growth so I'll be watching closely for how the changes really fall out.

Q: How do you think the labor market will look in the upcoming year?

A: Hiring the right people will continue to be a challenge due to a shortage of people among the types of roles we need. It's one of the reasons we're working with Apple and the city of Chicago on their 'Everyone can Code' initiative -- we all need more capable technical folks.

Q: What is a question/answer you think I should have asked?

A: Why is your business still in Illinois (and are you thinking of leaving)? I have business leaders from around the country asking me that all the time and it's getting harder to answer every year. This is where my roots are. There are great people and companies here. This is where I've built my businesses. I respect and live by Midwestern values. That said, it's very burdensome to try to grow a business here. Our state leaders don't act within the basics of economics, creating deeper problems for all of us and aren't willing to acknowledge the real issues and make the hard decisions required to fix the problems that have been created over a long period of time. Kicking the can down the road is not a strategy. Am I considering leaving Illinois some day? Until recently, I would never have thought about it.

n n n

Brian Burke

President and CEO, Links Technology Solutions, Schaumburg

Q: What is one issue you are concerned with heading into 2018?

A: It seems to me that our country, business-wise, has "righted the ship," if you will, and is heading in the right direction once again. But the awful, disrespectful treatment President Donald Trump gets from the press is absolutely astonishing to me. I don't know how he tolerates it. I'm a veteran of four years in the U.S. Navy, and one of the most important lessons I learned was to respect the "chain of command." The President is the top guy, period. I find it outrageous how he is treated. I was never crazy about President Obama, but I never talked about him with such disrespect. I think the press, and indeed many Democrats that do not support President Trump (like him or not), are teaching our children and grandchildren a very bad lesson.

Q: What is one tip you would give to someone just out of college and entering the business world?

A: Easy. Work hard. Come in early, stay late. Learn all you can. Knock off the "millennial" nonsense about enjoying life right now ... get to work. You haven't earned anything yet ... pay your dues.

Q: When it comes to business, what is your thought on the overhaul of the tax law?

A: I believe that any reduction in taxes, and I have to throw in loosening of silly regulations, is good for business. It stimulates the economy in so many ways: If I can maintain more of my company profits, I can pay my employees more; hire better and more qualified employees; and invest in new equipment that helps my employees be more productive, thus increasing the profits of the company, and on it goes. I've owned my own business (2 of them now), since 1978. I can state unequivocally, that my best years were the Reagan years, and the Bush years ... in both cases after tax reductions.

Q: One business book you would recommend?

A: I think everyone in business should read "Free to Choose," by Milton Freidman, followed by "Good to Great" by Jim Collins.

Q: How will the hike in federal interest rates affect business growth?

A: Rates are still so low that I think there will be very little change in business behavior for the near turn.

Q: How do you think the labor market will look in the upcoming year?

A: I'm worried about this. Our colleges are doing a shameful job. Charging students way too much, and turning out underqualified graduates. Add to this the unsustainable loan portfolio, and young people that don't have any idea how they will ever pay off the debt, other than by expecting the government to bail them out. It's not a pretty picture. This may benefit the absolutely best students, who will compete for the best jobs, and make great money right out of college. But this category of top people is about 10 percent of the graduate level … no more.