Published January 15 2010
Fargo-Moorhead economic outlook spurs optimismFargo-Moorhead’s economy is rebounding, North Dakota banks are lending money, and health care costs are expected to increase.
That’s what 400 people attending an economic forum were told Thursday in Fargo.
“What we find in the Fargo-Moorhead economy, with very few exceptions, is that a lot of things are growing and they are growing very substantially,” said economic growth strategist Delore Zimmerman. “We’re firing on all eight cylinders.”
Zimmerman, president and CEO of Grand Forks-based Praxis Strategy Group, was one of four speakers who addressed the 10th annual Regional Economic Outlook Forum sponsored by the Chamber of Commerce of Fargo Moorhead.
The investments being made in science and technology in Fargo-Moorhead are having a definite impact, he said.
“Our strategy is right, and the world is our market,” said Zimmerman.
Keynote speaker Sheldon Peterson, CEO of Virginia-based National Rural Utility Cooperative Finance Corp., outlined events, starting in 2007, that sent the U.S. economy spiraling into the deepest recession in 80 years.
The devastation, which spread globally, started with the collapse of 158-year-old subprime mortgage lender Lehman Bros., the nation’s fourth-largest investment bank, he said.
“The day Lehman Bros. collapsed it became extraordinarily obvious that this was a situation that was beyond the Fed’s (Federal Reserve Board’s) hands. It was a bigger problem than they could even quantify because everything simply stopped,” he said.
Things are starting to improve. One Wall Street market that his company works with has made a 180-degree turnaround in the past 12 months. A year ago it was the worst capital market he had ever seen, Peterson said.
The economic climate is also improving for North Dakota banks, said Rick Clayburgh, president and CEO of the North Dakota Bankers Association.
Community banks, like those operating in North Dakota, had nothing to do with the subprime lending fallout, he said.
“But the focus of the problem was on banks in general,” Clayburgh said.
From Sept. 30, 2008, to Sept. 30, 2009, North Dakota banks increased lending by 5.3 percent and have sufficient credit to lend to credit-worthy borrowers, he said.
“We have no reason to believe that any bank is in a position of failure in 2010,” he said.
Costs of health care are expected to increase, in some instances dramatically, said Ross Manson, health care consultant with Eide Billy LLP.
Much depends on what happens with proposed health care reform legislation currently before Congress that Monson described as 1,300 pages of black print on white pages and a whole lot of hot air coming out of Washington, D.C.
Going forward, health insurers are going to be expected to do more with less, he said.
“We as Americans need to do a better job of maintaining our health,” Manson said.
Readers can reach Forum Business Editor Craig McEwen at (701) 241-5502