How Your Company Can Respond to Houston Economical ChangesApril 01, 2020 | By Wayne O'Neill
One of the key principles that we emphasize in our business coaching with company leaders is the importance of responding. Not a hasty, reactive response. But, a careful and considerate response by evaluating the next best steps to take when swimming in the unpredictable waters of today’s markets.
Never before has the response been more important than in today’s economic climate when the global pandemic of COVID-19 has created a tremendous strain on markets and businesses.
It’s easy to get caught up in the daily roller-coaster watching the Stock Market swing wildly on the latest breaking news alert. Or, get caught up in the so-called “Oil War” between the U.S. and global oil producers that is impacting the Houston economy.
We know this a concerning time for many Houston business owners and organizational leaders, but our goal is to help business owners make it through to the other side of the COVID-19 health crisis by looking at ways to respond to the impact of the coronavirus on the Houston economy.
How is COVID-19 Affecting the Houston Economy?
The preliminary indication is that Houston will follow the U.S. economy into a recession period. There are any number of forecasts on the severity and length of the recession.
Indications from leading economists, government officials, and business leaders is that Houston will still face a long battle to the other side of growth.
– At the local level, the Greater Houston Partnership believes that the “next 12 to 18 months will likely be very rough for Houston” based on the combination of a national recession and turmoil in global oil markets.
– At the state level, Texas Comptroller Glenn Hegar recently predicted drastic budget cuts (billions of dollars) for both the state’s general revenue and the savings account balance when he proposes a revised fiscal forecast this summer.
– At the national level, McKinsey & Company continues to release regular forecasts on the implications for businesses based on multiple forward-looking scenarios. In one potential scenario, they predict a “sharp fall in consumer and business spending” until the end of the second quarter and a “slump” that extends until the end of the third quarter.
When you combine local, state, and national data points, the outlook is concerning. Fortunately, the federal government is stepping in to try to help reduce the blow.
The federal reserve’s recent rate cuts and the $2.2 trillion stimulus package bill that was passed on Friday, March 27 were necessary moves to try to limit the damage to the national economy and help businesses around the country and in Houston. These measures won’t solve this far-reaching problem, but every bit helps right now.
And, we can find long-term optimism from the respected Robert W. Gilmer, Ph.D. from the Institute for Regional Forecasting at the University of Houston. Dr. Gilmer predicted in his economic forecast report on COVID-19 that “once the pandemic and its losses end, Houston moves on from a moderate recession to renewed growth.”
How to Respond During This Period of Economic Uncertainty?
This is a time for strong leadership. Business owners and organizational leaders need to continue focusing on making the next best decision for the overall organization, for their employees, and for their customers.
One way to show leadership during this time is to take a long-term view of new opportunities to position your company or organization.
I get it. Right now, you’re just trying to maintain operations. But, lift your eyes just a bit over the top of today’s immediate challenges. Reset your thinking to take a longer view down the timeline to see how you can be positioned for growth coming out of this crisis.
From the conversations I’ve had with our partners on Wall Street, investors are looking for opportunities to drop cash into secure, high-yield capital projects.
Whether you’re in healthcare, higher education, construction, or another industry with capital project opportunities, sovereign wealth is available and out there waiting for a home. The financing structure to get these capital projects off the ground is concession funding.
Thanks to our strong relationships in the market, we can help facilitate these opportunities for your organization through our proven methodology, The Connection Process. We are focused on project scope creation and accelerating deal flow to expedite projects.
Let’s start with a conversation about your current challenges and project scope that can be created. Contact us today to discuss.