Arkansas CEOs look at 2014 crystal ball

story from Talk Business, a TCW content partner

Talk Business Arkansas asked seven Arkansas CEOs across a broad spectrum of industries to look into their crystal balls and share what they expect in 2014.

Ed Drilling, President
AT&T Arkansas

I think we’re going to continue to see growth in our area of the business. We started a process last year that we call Project VIP as a result of all the demand that we’re seeing in wireless data traffic from individuals and companies that need more bandwidth.

I think in terms of the economy, we’ve seen a few slow growth years. Businesses and consumers were cutting back, but the business has seemed to be coming back into the marketplace. We’re seeing more technology purchases. I think it’s either they can’t wait any longer and they’re seeing so many needs that they’ve got to fill with more bandwidth and more robust technology products, such as Ethernet and fiber – we’re seeing that all come back in. And we’re certainly seeing an explosion in mobile.

Millie Ward, CEO
Stone Ward
We don’t do political, but it is going to be an advertising-rich year for our industry. There is going to be a lot of money spent in the advertising sector on political advertising, in this state and nationally. I heard a statistic the other day that when Carter ran against Ford in the ’70′s, they spent $65 million. Last year in the governor’s race in Virginia, they spent $65 million. That’s just so compelling to me.

We’re excited about the economy and the recovery because we are seeing, across our client base, people beginning to invest more in growth. A few years ago it was a time for everybody to get very lean, and in our business, a number of our clients at a national level have done that. Now, they’re all looking to grow.

Duane Highley, CEO
Arkansas Electric Cooperatives Corp.

We’re really excited about the future for Arkansas right now because unlike any year in recent history, we’re seeing more inquires, more economic development prospects, more people asking about getting electric service to new areas. It’s just at a higher pace then it has been, so I’ve got to believe that even if some of that comes true, it’s going to be good news for Arkansas. The economy appears to be turning, slowly, but turning.

We’re also entering a brave new world in the way power is bought and sold -where computers talk to each other and make arrangements between generating plants across the entire United States grid, and find the cheapest source of power every five minutes… It will provide us an opportunity to continue to provide power at some of the lowest rates in the country.

Bo Ryall, CEO
Arkansas Hospital Association

As we reach the end of 2013, it has been a very difficult year for hospitals financially. The implementation of Medicare reimbursement reductions, sequestration cuts, and 10% declines in hospital admissions have all contributed to a very difficult year. Couple that with the federal government’s healthcare.gov website issues in enrolling the uninsured for insurance and it does not make for a positive outlook for 2014 in health care.

We are very pleased with the enrollment in the Private Option with more than 60,000 in the program and increasing daily. We remain cautious as far as the enrollment on the federal website, but improvements have been noted.

We are also keeping a watchful eye on how Congress deals with the Sustainable Growth Rate formula, which governs Medicare physician fees. We are fully in favor of a change that would remove the threat of annual physician fee rollbacks, but we are also apprehensive about the “pay for” of such a change, which could rely heavily on steeper Medicare spending reductions for hospital care.

The uncertainty in the impact of a changing health care system leads to widespread concern going forward. An improved 2014 will be dependent on the number of uninsured that will now have some type of insurance.

Darrin Williams, CEO
Southern Bancorp

I am optimistic about 2014, but cautiously so. I see challenges but also opportunities in the year ahead for the rural markets served by Southern Bancorp. As a rural community development bank, we’re seeing firsthand the anemic post-recession recovery that rural communities are experiencing.

As banks continue to abandon rural America, more small towns are left with either limited or no access to capital and traditional banking services. Less access to capital means an even weaker recovery because community banks have been the driving force behind small business growth. That said, I think the situation lends itself to opportunities for innovation in these areas.

At Southern we are looking at a variety of ways to bring new financial products and services to these communities to help jumpstart those economies and put them on a similar track as their urban counterparts. From that perspective, it’s an exciting time to be a rural community development bank. Southern is proud to be one of nearly 900 Community Development Financial Institutions (CDFI) across the country that are stepping into underserved communities and creating more fairness of opportunity across America.

With challenges come opportunity, and I choose to see the coming year as the latter.

Judy R. McReynolds, President & CEO
Arkansas Best Corporation

My outlook for the 2014 economy is that while certain markets like manufacturing and auto may be stronger, I anticipate slow growth in general.

The good news for Arkansas Best is that we have growth opportunities in many industries and verticals we serve, despite my expectations for a slow-growth economy overall. I’m bullish about those areas, especially given the wide variety of transportation and logistics services we now offer customers from all of our operating companies. But I’m also concerned that government regulations and programs like The Affordable Care Act are hurting business and job growth in particular.

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Also concerning is the fact that banks aren’t seeing loan growth, which indicates that businesses in turn are not seeing many opportunities to invest. I’m having a difficult time identifying a catalyst for more rapid economic growth any time soon.

Ray Dillon, CEO
Deltic Timber Corporation

We’re looking for 2014 to be as good and, hopefully, better than this year. We continue to see growth expand at a moderate rate. We think we’ll see positive housing starts and that will help our lumber business. And from a real estate standpoint, we think central Arkansas will begin to show more growth than it’s shown as we come out of this recession.

Unemployment is the biggest factor that will impact us. It drives free cash flow for consumers. We hope to have people in their starter homes looking for their next larger home. That will generate new household formations and new home starts. That’s what we’re expecting, and we see that activity impacting our lumber business in a good way.

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