Area businesses ready to push ahead in 2013

December 28, 2012

Area businesses ready to push ahead in 2013

By Emily Behlmann

The Wichita Business Journal

Businesses have weathered a recession, a presidential election and the beginnings of the national health insurance overhaul.

Heading into 2013, much of the uncertainty in the business operating environment is connected to the federal budget. Maybe we’ll go over the “fiscal cliff” of dramatic tax hikes and spending cuts. Maybe a deal will avert the cliff but will zap some business drivers, like the mortgage interest deduction, instead.

“I think if we could see some stability, that would have a dramatic impact,” says Gary Plummer, president of the Wichita Metro Chamber of Commerce, looking ahead to the coming year.

But some Wichita business leaders say they’ve gotten used to the uncertainty by now. They say they’ll push forward to make 2013 the best year it can be.

“In a turbulent environment, we have adapted to what we have to do to be successful,” says Sam Williams, a chamber leader and a managing partner at advertising agency Sullivan Higdon & Sink. “We’re tired of worrying about external forces. We’re doing what we need to do. People are taking ownership of their own world.”

Reasons for optimism

That means, says Ben Hutton, president ofHutton Construction Corp., that if a company needs to build, it’s likely to do so.

Hutton says his business is seeing a slight uptick in construction work in the region. Construction is a major driver, but Hutton is also seeing a little more work for the manufacturing sector.

“People are starting to say, ‘It’s time for us to move forward with whatever plans we have,’ ” he says.

In some cases, those plans involve hiring. Wichita State University’s Center for Economic Development and Business Research projects the Wichita metro area will see modest job growth — about 1.7 percent — in 2013. But the type of job growth some human resource professionals are seeing could be telling, says Trinidad Galdean, a Hinkle Law Firm attorney and president of the Wichita chapter of the Society for Human Resource Management.

Galdean says that in late 2012, more employers have been searching for talent to fill high-ranking management positions.

“They’re looking to get their infrastructure ready so the business will be in a better position to grow,” he says.

A particularly bright spot is in downtown Wichita, says Tom Docking, a partner at the Law Offices of Morris, Laing, Evans, Brock & Kennedy, Chartered, and chairman of the board of the Wichita Downtown Development Corp.

Downtown is coming off a strong year of redevelopment, Docking says, and “if 2012 is any indicator, 2013 will be full of announcements.” Some projects are already under way, including the Kansas Health Foundation’s new leadership center and apartment projects like the Lux. Others look ready to move, like the Exchange Place apartment renovation, now in the hands of a new developer. Docking says the low-interest-rate environment is likely to help the momentum continue.

Jeff Ronen, senior vice president and commercial lending manager at Fidelity Bank, says he’s feeling bullish about 2013, too. He says a wide spectrum of businesses, from manufacturers to real estate investors, are moving forward on deals.

“We have a very active pipeline of deals in the works,” he says.

But some business leaders are tempering their confidence with a bit of caution.

Elsewhere in the realm of development, Brad Saville, CEO at Landmark Commercial Real Estate and chapter president at the Certified Commercial Investment Member Institute, says new retailers and restaurateurs continue to enter the Wichita market. But chains’ expansion plans are much slower and steadier than they were several years ago, he says.

“I think 2013 will be marginally better than 2012,” says Lynn Nichols, CEO at Yingling Aviation.

Concerns remain

Some disrupters could threaten the momentum of 2013. Saville notes, for example, that if capital gains taxes rise in 2013, that could deter some real estate investors.

In residential real estate, Tessa Hultz, CEO for Wichita Area Association of Realtors, says the Wichita area is on track for a continuing slow, steady housing recovery. Nine of the first 11 months of 2012 saw positive year-over-year growth in home sales, she says, and modest growth is likely to continue. One thing that could temper homebuyers’ confidence, however, is the possibility that Congress will eliminate the mortgage-interest tax deduction.

Another hit for the Wichita economy will be the departure of The Boeing Co., which announced in 2012 that it would shut down its local defense modifications plant by the end of 2013. At the time of the announcement, Boeing had 2,100 local employees.

Some are finding new work. Bob Brewer, Midwest director for the Society of Professional Engineering Employees in Aerospace, says a couple of hundred Boeing engineers will stay with the company in Oklahoma City. Others have found jobs at Spirit AeroSystems or Airbus in Wichita.

“Some are retiring, and some don’t know yet,” he says. “They’re all major life-changing events.”