Richmond Economic Forecast
I attended this event sponsored by Richmond BizSense. It started at 7am with a great breakfast spread with coffees, teas, juices and water. At 8am, the session promptly started with a panel of business leaders from Richmond, VA.
The Business Leader Panel
It was a very interesting conversation with the panelists. Below are some of the points/ideas I found interesting:
The consensus was that business conditions are quite good right now, but not as good as they were in the year or two after the pandemic.
Inflation has become a much less pressing problem.
Nupa expects there to be quite an uptick in bankruptcies in 2025.
Everyone wanted interest rates to be lower.
Commercial real estate was strong for industrial and retail.
There was apprehension about immigration policy. The builder and developer both worried that tighter immigration would put further upward pressure on building costs, which could put projects on hold.
Housing affordability is a problem with no clear solution.
The Economist Panel
These were my key takeaways from the panel:
Business optimism is much higher than it was earlier last year, according to both Gus and Renee.
According to Renee, the latest outlook is for the Fed to cut rates two more times in 2025. As recently as a few months ago the expectation was for four rate cuts in 2025.
Tariffs could be inflationary, with all three hoping that they target elastic goods. Great advice for economists in the administration - knowing that there are going to be tariffs, try to sway the administration to put them on goods that won’t have much of an inflationary impact.
The key fear in tariffs is the risk of a trade war - with a trade war, all economic projections are off.
The office market of commercial real estate could be in trouble as loans that were refinanced 10 years ago start coming due.
Careful with immigration - lower immigration will lead to lower long-term growth rates in the United States.
