Marshall Loeb, senior correspondent with CBS Market Watch, is considered by many to be the dean of American financial forecasting following stints as managing editor of both Fortune and Money Magazine, as well as Time magazine’s business and economy editor.
In a recent trip to Colorado Springs to address the Greater Colorado Springs Economic and Development Corporation, he outlined ten developing economic trends on the national front for local business leaders.
To kick off his presentation, the veteran financial columnist and author also acknowledged longtime friend and former Time, Fortune and Money Magazine colleague, Jim Hayes, former CEO of Junior Achievement and a resident of Colorado Springs.
Loeb addressed changes ahead for the U.S. and global economies, pointing to first quarter growth in the manufacturing and housing sectors, increased national productivity and year-over-year increases in corporate profits (the first in two years) as a sign that the national economy remains strong. Less optimistically, he also believes that the world may not return to its pre-September political calm in our lifetime. Terrorism is now a fact of life throughout the world.
Today’s bad news, says Loeb, comes from a weakening U.S. dollar and increasing trade deficits, from an increased threat of worldwide terrorism, from the development of nuclear weapons by nations in southeast Asia, and from a classic “bear” market. Still, he sees hope for long term stock market investors, citing a five to ten year forecast of 10 percent returns.
Portfolio diversification holds the key to investor satisfaction – and Loeb anticipates a reviving technology industry that will fuel future economic recovery. “The market desperately needs another killer act,” he said, noting that broadband technologies offer the best new technology investment platform.
The Internet will continue to allow companies from giant Proctor & Gamble to Colorado Springs’ entrepreneurial start-ups to flourish in the coming decades, he predicts. As an example, Loeb said that to date, General Motors earned $87 million in Internet-generated sales last year – and Honeywell research indicates that it has saved hundreds of millions of dollars in sales costs and travel by using Internet-customer communications.
Loeb believes that young employees who are experiencing an economic downturn for the first time will value longevity on the job – and continued employer competition for top employees will encourage more attractive benefit packages. Harvard and University of Southern California research back up this key factor in future competitive dominance.
Other trends on the horizon, says Loeb, include increased globalization of trade and multinational lawmaking; increased world terrorism and threat generated by small, developing countries rather than by large superpowers. Additionally, he cites the success of a new Russian economy (with productivity jumping 8 percent in 2000 from the previous year); the emergence of China rather than Japan as an Asian economic leader; moves by rich, stable nations to help poorer nations, and increased immigration challenges through Europe and North America.
Following his presentation, Loeb also answered numerous questions from the audience on issues of local concern.
EDC chief executive Rocky Scott welcomed Loeb’s insights, noting recent ups and downs in the local manufacturing, high–tech and defense sectors, as well as uncertainty about Colorado Springs’ role as the Northcom Homeland Defense headquarters (with U.S. Space Command headquarters likely to be moved to Offut Air Force Base in Omaha later this year).
He also expressed frustration that prospect inquiries about moving corporate operations to the Pikes Peak region are generating no action. “These are interesting times for our community,” Scott said.
A former managing editor of Fortune and Money and as Time’s business and economy editor for years, Loeb has also served as a director of Priceline.com. At age 73, he is recognized as one of the country’s foremost economic observers and recently authored 52 Weeks to Financial Fitness (January 2001), available on Amazon.com. Loeb was also recently chosen by a panel of his peers as one of the 100 most influential business journalists of the 20th century.