On Tuesday, December 14, 2021, over 200 financial professionals, small business owners, corporate executives, real estate agents and other professionals gathered at the Royal Banks of Missouri Economic Forecast Breakfast to discuss the economic outlook for the St. Louis region. After meeting virtually last year, getting to meet in person to discuss our region felt like Christmas came early. The information and knowledge shared at this event is vital for business owners, business professionals and all who work and live in the St. Louis region. The following are a few of their key takeaways.
The event kicked off with special guest speaker Michael Staenberg, president of The Staenberg Group, who discussed the real estate market. Staenberg emphasized the importance of a return to long-term thinking in real estate and the stock market. Read a summary of Staenberg’s presentation in an article written by Jim Drew of the St. Louis Business Journal.
Robert Hardcastle, CEO of Delta Investments, highlighted the continued changing landscape of 2022. He noted that while the economy may begin stabilizing by mid-2022, the elections next fall or a number of other issues could keep upsetting the balance. Hardcastle concluded his outlook for the next year with the comparison of the economy to a bull ride — it’s going to be wild.
5 key challenges for 2022
Next was Ron Ameln, owner and president of Small Business Monthly, who discussed the state of small business in 2022. Ameln highlighted five key challenges for 2022: inflation, retaining employees, hiring, COVID and technology and security.
The inflation levels we are seeing today have not been felt since the 70s and 80s. While inflation is often termed a “dirty” word in business, Ameln encouraged all to seek out professionals who experienced the high inflation issues of the past and use their knowledge. He gave an extra warning to those in the fixed pricing industry to really hone in on your efficiencies to survive this current inflated market. It comes to no surprise that retaining current and hiring new employees is going to continue to be a struggle. With so much public attention given to the hiring pool issues, Ameln emphasized the continued importance of retaining staff with 10 plus years of experience. Ameln estimated that the staff that have worked with a company for 10 years have the efficiency level of five new workers. Both new workers and long-time workers are demanding benefits that matter such as flex time, childcare assistance and clear career paths. Ameln ended on an eventual positive note, stating that growth will be slow in 2022 but that inflation will lower throughout the year. He added that 2023 and 2024 will hopefully be the upswing our economy is waiting for.
Population growth
Dr. William Emmons of the Federal Reserve Bank of St. Louis rounded out the speakers for the day, with a look at a long-term issue facing businesses in our region and the nation: population growth. Emmons explained that population growth directly impacts economic growth and while population growth has been decreasing for some time, the recent COVID pandemic has exacerbated this issue.
In the state of Missouri over the last 10 years, two-thirds of our counties have lost population and St. Louis has been found to be one of the slower growing metropolitan areas in the Midwest. Over the past five years, Indianapolis, Kansas City, Cincinnati, Louisville and Memphis have all grown faster than our region. Emmons provided three options for improving our population and thereby economic growth: actively support immigration into St. Louis and the U.S., bolster public health and mental health to protect and extend life, and invest in our region’s quality of life to retain and attract young and growing families. Due to the government blackout period, Emmons was not able to address the economic outlook during the event. However, when the blackout period ended, he shared his economic outlook on his blog, Take Five with Bill Emmons.
This was a hard year for our region, for our businesses, for our forecasts. Unfortunately, our speakers confirmed that next year is not going to feature a return to a stable economic environment. However, every speaker had suggestions and advice for how to keep your business and our region moving and growing. Focus on retaining current staff, keep improving your business’ efficiencies and don’t forget your and your team’s mental health. Keep moving through the tunnel and our region will get to that light.
Visit the Royal Banks of Missouri website to view the presentations and recordings from this year's Economic Forecast Breakfast.
At Royal Banks of Missouri, investing in our communities is our first priority. For nearly 60 years, Royal Banks of Missouri has proudly served the St. Louis community. We are locally owned and offer a full range of banking services to individuals and business clients in St. Louis and Illinois.
Ashley Gates, senior vice president and president of the St. Louis Metropolitan Area, has been with Royal Banks of Missouri since 2013. She specializes in commercial and industrial lending and can be reached at Ashley.Gates@royalbanksnet.com or by calling (314) 212-1500.
