CEOs Have High Hopes For The Year Ahead

Meanwhile, Skillett has a front-row seat on the consumer side of the American economy, because most Americans still use cars to conduct economic activity. Skillett, who is CEO of Citizens Parking, a $1 billion operator of parking facilities based in New York City, is bullish about 2018. Parking volume flattened out in 2017, he says, guessing that many companies “put off their investments until later” in part “because of all the political noise.” Heading out of 2017, Skillett predicts that those who took a wait-and-see approach will be more aggressive in 2018, having seen “that year be relatively safe for corporate earnings…They just delayed things a year.”

Retail Running Out of Runway?
One thing some CEOs worry about for 2018 is the continued crumbling of the traditional bricks-and-mortar retailing business across America, exemplified by the recent Chapter 11 bankruptcy filing by Toys “R” Us and indoor shopping malls falling prey to the disruptive power of e-commerce.

While recognizing that Amazon and other online retail giants are creating thousands of jobs in warehousing and distribution, many CEOs believe that the dislocation caused by the accelerating demise of so many stores will be difficult for the economy—as well American workers—to absorb.

“Retail is facing significant disruption. So is healthcare. We need to put greater focus on what’s happening to these individual industries.”

“Historically, the economy has been a rising tide, but now it’s critical that we’re starting to see significant differences within industries operating within the same economy,” says Knotts. “Retail is facing significant disruption. So is healthcare. We need to put greater focus on what’s happening to these individual industries.”

Anything that hasn’t been reimagined and was a legacy shopping mall—even if it’s been renovated in the last decade—we’ve seen a pretty significant falloff of traffic,” reports Citizens Parking’s Skillet.

Barbara Moran-Goodrich, CEO of Moran Family of Brands, a collection of automotive-aftermarket franchises based in Midlothian, Illinois, worries about the ripple effect of “big box retailers” closing locations. She wonders “how the auto industry will be impacted by changes that are occurring in how people shop and whether that will impact employment, even next year.”

Millennials, says Moran-Goodrich, “have changed the dynamic in how you go about shopping for things.” As traditional retailing jobs vanish, she adds, spending by American consumers will drop.

The Trouble with Tech
Many CEOs see technology topping the list of big risks for their companies, their industries and the economy. Cybersecurity is a big vulnerability, as evidenced by the Equifax breach that exposed the Social Security numbers and other private data of as many as 143 million Americans to theft.

McGuire of Grant Thornton adds that many CEOs’ biggest risks in 2018 will involve how “you keep your customer base in the face of technological disruption,” such as that being wrought by Amazon’s takeover of Whole Foods Markets, which is rattling verticals from consumer packaged goods to trucking. “These kinds of things can be threats to your business models, and that alone creates lots of uncertainty for 2018,” says McGuire, pointing out that disruptors can lure customers away by coming up with a faster, cheaper or more convenient model. “CEOs know disruption is coming. But do they have the right technology platform and strategy as business becomes more digital and data becomes more and more important?”

Jesse LaFlamme, CEO of Pete & Jerry’s Organic Eggs, a $180 million producer based in Monroe, New Hampshire, predicts that “all food prices will see more pressure on prices and margin” because of the Amazon-Whole Foods deal. “It’s a simple fact that there’s too much capacity in food retail right now, and Amazon-Whole Foods is changing that dynamic, adding to the pressure.”