At a recent gathering of fast-growth inner city companies, founders and CEOs were surprisingly optimistic about the economy.
At a recent gathering of fast-growing inner-city companies, the consensus was clear: We’re back. Manufacturing is back. Things are getting better.
Granted, these are all companies being recognized for their fast growth. But many of them are in industries that also give them a bead on how the larger economy is doing.
The one CEO who said he wasn’t sure which way the economy was headed was Jeff Silver, CEO of Coyote Logistics. Shrugging, Jeff says he doesn’t know what’s going on with the economy “any more than the guys on Squawk Box.” But ask how many employees his company has, and he replies, “1,025 today; 1,040 by Monday.” Revenues were $560 million last year, up from $328 million the year before.
Coyote Logistics in the winner of the Initiative for a Competitive Inner City’s annual Inner City 100, which is a ranking of the fastest-growing inner city companies. Over five years, the companies on the list have racked up an average compounded annual growth rate of 39% and have created, collectively, 4,634 new jobs, according to ICIC.
Silver’s nonchalance about the economy seemed to be unique. As a group, the other CEOs were much more optimistic. Deborah Fennick, co-founder of Fennick McCredie Architecture (number 57 on the list), says her firm is seeing more public spending thanks to the stimulus bill. But she says the business environment is improving even aside from that spending, and sees it continuing to do so.
Julie Hakman agrees. She’s President and CEO of Tulsa-based AmericanChecked, which runs background checks. Her company placed at number 70 on this year’s Inner City 100 list, and since 2009, she says, the economy has got “better and better and better.”
Mike Chaudhary is the CEO of DMC Consultants, a construction and consulting services company in Detroit (number three on the IC100 list). He says he has “full faith” in Detroit, and points to increased investment in the midtown section of the city. The business environment, he says, “is getting pretty good.” He’s less worried about the economy than about his ability to find qualified staff. He interviewed 40 people to find the “one capable person” to come on board as a project manager.
Drew Greenblatt, President of Baltimore’s Marlin Steel Wire Products (number 95), says he’s “very bullish” on the economy and on American manufacturing in particular. He says that “a lot of conventional wisdom misses what is happening in American engineering.”
First, he says, costs are getting pretty high in China. Greenblatt says it costs more to hire a mechanical engineer in China than it does in the U.S. In three to four years, he says, factory workers in China will be earning $7.50 an hour.
And unconventional methods of drilling for natural gas (fracking), have made the U.S. “the Saudia Arabia of natural gas,” says Greenblatt, dramatically pushing down energy costs here. In the U.S., natural gas costs $2 per btu. In China? $20.