... he is “cautiously optimistic†regarding a U.S. and global economic recovery in 2010, and notes that those companies involved with infrastructure building are best poised for near-term success. William F. ‘Ted’ Truscott, a Chief Investment Officer with Ameriprise Financial, was addressing airports, consultants, and government officials attending last week’s Airport Planning, Design & Construction Symposium in Atlanta. The event is co-sponsored by the Airport Consultants Council and the American Association of Airport Executives.
Truscott says “the whole world is growing again†with some exceptions, notably Greece. In particular, China and India continue to report strong growth rates which are directly linked to massive infrastructure investments being made in those countries. Those countries, along with Brazil, offer a tremendous source of demand for infrastructure-related providers, relates Truscott.
Similarly, he estimates that the U.S. will need to invest some $2 trillion in infrastructure investment. He points out that two-thirds of the federal economic stimulus funding has yet to be spent, though that will likely be targeted at non-aviation transportation. The trickle-down effect, however, will have an impact. Of course, the $1.1 billion of stimulus funding targeted at airports was disseminated quite expeditiously by FAA over the past year.
Overall, Truscott sees a “sluggish†economic recovery for the U.S. through the end of the year, with unemployment holding at around 9 percent. Normally, he says, with a deep recession like the one the country is recovering from, forecasters would have expected growth rates of 6-7 percent; instead, the U.S. will see growth of some 3 percent this year.
Truscott foresees a resurgence in technology investment, following a drop over the past decade. He also sees opportunity returning to Wall Street, and expects the stock market to see 10 percent growth in 2010. He sees the Federal Reserve maintaining low interest rates, which he calls “good news†for credit creation. And, on the subject of a downturn in commercial real estate, Truscott says “we view it as an opportunity†and says that the major banks in the U.S. already survived their “stress test†in 2009. However, he adds, “There are going to be issues at some of these smaller banks.â€
The “biggest issue†facing the U.S. economy, Truscott says, is debt. He relates that the U.S. is currently holding a debt level that is the equivalent of some 12 percent of the economy. “We can only sustain a 3 percent deficit,†he comments.
Getting specific about aviation, Truscott predicts an increase in business travel over the coming year. There is no substitute for “face to face†contacts and that Internet webinars and video conferencing can “only go so far†in promoting commerce.
Thanks for reading. jfi