2016 could be banner year for regional business climate

Decisions made on key issues in 2016 will likely impact development, cause ripple effects for years to come

Tim Schauer

Last year in this column, I provided my thoughts on the three primary markets our company serves: land development, transportation and energy. I could do the same again this year in looking ahead to 2016, but the truth is not much has changed. Uncertainty is all you can be certain of. Your willingness to accept and plan for some level of uncertainty is a big influencer for any business person’s economic forecast.

With not much changing, this year I’ll talk only briefly about land development, transportation and energy. I will then take a broader view and discuss the current issues I think present risk to this region’s business climate in 2016.

Land Development, transportation and energy
Land development should continue to see growth across all or most categories (residential, office, retail, industrial, education, hospitality, healthcare and community projects), but your business plan should also include keeping an eye on when you think the market will peak next and when it will recede again.

In the transportation market we’re seeing some small victories in the realm of asset maintenance. Examples include the cities of Battle Ground and Vancouver passing new street programs, the state’s $16 billion gas tax package and the recent federal transportation package. However, these victories are just slowing the decline of our infrastructure, and there is little light at the end of our tunnel for commuter congestion and freight mobility improvements. I still believe the transportation sector will eventually be a deep and robust market for several years, but only after we all decide on a deeper funding solution for our transportation system’s priorities.

The energy sector has been strong for several years. This market has tempered some this year, but it is still deep with opportunity, primarily due to its diversity. The energy market includes hydropower, natural gas, wind, solar, oil, coal and more. The Northwest has a very diverse energy market and there is opportunity for those that research and retool to meet the needs of the public and private clients in this sector. This market will be strong for at least another decade.

Regional issues
When I step back and put my regional glasses on, I see that we are well-positioned for continued economic development. Our economy is growing and adding jobs, we have natural resources and we have a strong workforce. However, we also face some important issues that will influence the business climate in 2016. Whether the influence is positive or negative depends on your point of view, but one thing is certain: decisions made on these issues in 2016 will likely cause ripple effects for years to come.

Here are some of the key issues we face in 2016:
State and federal climate control rules, regulations and voter initiatives. (How much of our economy are we willing to risk and how much are we willing to spend to fund new and growing air and water quality standards?)

How we deal with commodities trade and moving those commodities to and through our region. (Including the specific commodities, the safety of moving them here, commuter congestion impacts from freight, social views on trucks, pipelines, rail, cargo ships and terminals.)

How the state resolves education funding to meet the McCleary decision.

I’m not suggesting which way these issues should go, although I certainly have my personal and professional perspectives on each. What I am suggesting is that you inform yourself, pay attention to these, and contemplate how outcomes on these issues will impact your business, your employees and your clients and plan accordingly.

As I said earlier, uncertainty is all you can be certain of. Entrepreneurs have an appetite for risk, but the size of that appetite varies widely. My appetite has tempered yet again this year, so that I would now describe myself as an optimistic-realist. I’m optimistic about opportunities for our business, but I’m realistic about the increased competition. I’m optimistic the average person recognizes the urgent need for infrastructure investment, but realistic that most are still hoping someone else will find a way to pay for it. I’m optimistic that employers will continue to add jobs, but realistic that recruitment and retention of talent will be increasingly challenging.

We’re all developing a better instinct for this new economy. The economic waters are choppy. But if you pay close attention, assess the amount of risk you’re willing to take, and plan accordingly, 2016 could be a banner year for your business.

Tim Schauer is president and CEO of Vancouver-based MacKay Sposito, the Board Chair for the Columbia River Economic Development Council, former chair and current member of the Greater Vancouver Chamber of Commerce board of directors, a member of the executive committee for the Association of Washington Business, and a member of the Greater Portland Inc. 2020 steering committee. He can be reached at tschauer@mackaysposito.com.