By Jim Hohorst
Contributor
The Greenwich Chamber of Commerce’s members are telling us that 2016 was by and large a good year. Not a great year, but better than last year and certainly better than a few years earlier.
Within the Greenwich business community, there are sectors that are doing very well, and others that are still lagging. There are a number of reasons for this, and, while many are outside our control, both businesses and town leaders need to be aware of and adapt to these changes to thrive in the future.
Demographic shifts are having a significant impact. Millennials are marrying later, deferring starting a family, and, when they do have children, having fewer of them. They and their parents, as they become empty nesters, are seeking a more urban lifestyle than prior generations did, with easy access to shopping, dining and entertainment.
While this has led to less demand for housing in the suburbs, Greenwich remains in better shape than other bedroom communities, offering as it does one of the most sophisticated business districts outside a major city. We’ve seen that demand for housing close to our business districts has been strong. The other side of the coin, however, is that larger and more secluded properties farther away from town have been more difficult to sell.
Another big factor has been the shrinking of the financial sector both in New York and Fairfield County. As the Fairfield County Business Council’s Chris Bruhl pointed out at our annual meeting earlier this month, Fairfield County may be in Connecticut, but its economy is much more tied to New York City than to Hartford or New Haven. As the financial sector has shrunk and compensation has been pared back, Greenwich has no doubt suffered. While Wall Street bonuses will recover, it’s likely to take a few years.
In New York City, employment has rebounded, led by health care, education and technology. But those businesses are much less likely to relocate outside the city, and as a result, the recovery in employment in Connecticut has been much less robust than in New York or Massachusetts. We need to do more as a state to develop the technology skills that make us attractive in the new economy. If GE does decide to relocate, it will likely do so to be closer to a technology hub central to their vision of their future, and not because of taxes or public sector debt.
Finally, we’re seeing a continuation of the trends in retailing that have transformed our shopping streets over the past decades. It’s estimated that 30 percent of America’s shopping malls will close in the next 25 years. Consumers can buy what they want when they want it online. If they venture out to stores, it’s for a shopping experience, not just to get something. The combination of top name stores, unique local shops, and quality restaurants gives shoppers that experience. That’s why, at a time when much commercial retail space is vacant across the country, Greenwich remains in high demand.
Looking ahead, our members have told us they expect next year to be better than last year as the national economy continues to rebound. With interest rates expected to remain historically low for the next few years (even as they began what will be a long uptrend last week) and little sign of commodity inflation, traditional risks to this recovery seem remote.
What is worrying our members? Labor costs and the availability of trained staff are concerns as the labor market starts to tighten. For some businesses, the high cost of real estate in Greenwich is a burden, but they also acknowledge that there’s more opportunity here.
Locally, regulations and parking continue to lead the list of impediments to growing businesses, but our members who do business in more than one town rated those issues only marginally worse in Greenwich than in other communities. There’s also a widespread feeling that personnel changes at Town Hall over the past couple of years have led to a much more open and cooperative attitude toward businesses and property owners.
Finally, and probably most difficult for businesses, is a prevailing sense of uncertainty: Uncertainty about the upcoming presidential election, uncertainty about taxes at the state and federal levels, uncertainty about the health of the economy and the durability of consumer spending, and uncertainty about unrest in the Middle East and what impact it may have on us here at home.
Our guess is the consensus is right and that 2016 will be another year of continued but perhaps unexciting growth, both here in Greenwich and nationally. As long as it’s not as “exciting” as 2008 and 2009, we can live with that.
Jim Hohorst studied civil engineering and urban planning and then worked in international trading for 25 years. Since 2006, he and his wife have run Student Employment Software, a technology company. Jim has been with the Chamber for several years and was just re-elected chairman for 2016.
