Lafayette College professor Edmond J. Seifried this morning told Carbon County business people that 2018 will have stronger economic growth in the U.S. and that small businesses will continue to flourish.
Held at Mahoning Valley Country Club in Lehighton, the event was hosted by Mauch Chunk Trust Co., in partnership with Carbon Chamber & Economic Development, the Tamaqua Area Chamber of Commerce and PPL Electric Utilities Corp.
Seifried gave insight into the economic landscape of 2018 and spoke about gross domestic product, interest rates and how businesses will be affected.
“GDP is the main driver of a business’ sales revenue,” Seifried said. “It’s the main driver of the banks’ income, it’s the main driver of your income.”
Seifried said that businesses will grow based on GDP’s growth, whatever it is.
He also noted that if America were to fall into another recession, interest rates would need to drop to incentivize people to shop, spend money and help drive business to again strengthen the economy.
He presented slides showing economic indicators, including rates and financial indexes, production and business activity and prices and financial indicators.
“If our GDP growth were zero, your business will never grow,” Seifried said.
He said that if the GDP grew at 1 percent, it would take 70 years for a business to double its size in revenue.
“If we could get 2 percent growth, which is what we’ve had, it would take 35 years to double,” he said.
Three percent growth would take 23 years, 4 percent at 17 years, and 5 percent at 14 years.
“Most people don’t understand the difference between 1 and 2 percent of GDP growth,” he said.
Seifried predicts that growth in 2018 will be well over 2 percent.
“As a business owner, estimate what your sales are going to be … then compare to the GDP,” he said.
He also noted that the federal government is expecting about 2.4 percent GDP growth in 2018.
He said that these numbers depend on rate of inflation, but that he expects the economy to continue to grow going into and through 2018. He said a full report from 2017 won’t be available until early next year.
“We project growth in the small-business community and for consumers to continue to spend as the economy continues to grow,” he said.
Over the years, Seifried has worked with community banks across the nation and is a resource for community bank directors, CEOs, senior management and others. He has led educational programs as dean for the West Virginia Banking School and the Virginia School of Banking.
He has been on the faculty of many banking schools, including Stonier and the Graduate School of Banking at Louisiana State University. Most recently, he is the executive director of the Sheshunoff Affiliation Program, a program that provides education and idea exchanges for community bank CEOs, lenders and technology/operations officers.