NCDM Speaker: Economic Recovery Will Be Slow, But It Is Coming
"Business leaders are very pessimistic and have been for quite some time, and as a result consumers are struggling a bit as well," said Dr. Mark Zandi, chief economist and co-founder of Economy.com Inc., an independent provider of economic and industry research. "Confidence is taking a big hit."
But Zandi predicted the economy would make its way through this soft spot to rebound by this time next year. He said several factors would help the economy grow in the months ahead: productivity growth, low interest rates and a strong fiscal policy and aggressive federal spending.
"All we can really say is that businesses have stopped cutting," he said. "They've stopped cutting their payrolls, they've stopped cutting their budgets in advertising and travel, but they haven't begun to expand, and until they do, the economy is going to have difficulty."
Zandi also cited the possibility of war with Iraq, saying that if the United States goes to war, it will happen early next year and "it will go relatively well. We will be successful, and it will last a few weeks and certainly no more than a couple of months. The consensus is that energy prices might spike early and then go right back down again. If this holds true, then next year will be fine."
Healthcare services, educational services, housing or mortgage banking industries, economists, veterinarians and collection agencies are hiring, Zandi said, while manufacturing, mining, investment banking, distribution, airline/travel and state government are still cutting workers.
Vendors on the trade show floor had mixed feelings about the economy and about their business prospects for next year.
"We've seen an uptick in business at the year's end, and we've hit our revenue numbers for the quarter," said Carol Meyers, vice president of marketing for CRM vendor Unica Corp. "We are also expecting to see an uptick at the beginning of next year.
"We are asking ourselves right now, is this just a bubble, or is this a sign of a recovering economy? Should we grow faster, or should we exercise more caution? It's hard to tell right now."
Meyers was also upbeat about NCDM. "We've found the show a lot better in terms of prospects than other shows we've attended this year," she said.
Robert McKim, CEO of SourceLink Software Solutions Group, Los Angeles, was optimistic about the business forecast.
"The service industry, which is the industry we are in, will come back before other businesses such as products or telemarketing because companies have hiring freezes and their IT budgets are frozen so they have to do more with less," he said.
Other vendors said that they expect more new customers next year, but that they are working with customers and prospects differently than they have recently. One vendor who requested anonymity said that more database marketing prospects are looking to work with his direct marketing agency on a project-by-project basis before signing on for a long-term contract.