Sherri Richards, Published February 26 2014
Local economic picture strong, but dependent on more workers
Business owners are largely optimistic about the region’s economy in 2014, a survey of Fargo Moorhead West Fargo Chamber members found. Most respondents reported an increase in sales revenue and profitability from 2012 to 2013.
But the difficulty in attracting and retaining qualified employees was rated the top factor expected to adversely affect business this year.
Staffing issues topped the list of factors negatively affecting performance in 2013, up from fifth in 2012.
Jim Gartin, president of the Greater Fargo Moorhead Economic Development Corp., called it an “800-pound gorilla.”
Overcoming the workforce issue is “the only way we’re going to have continued, sustainable growth,” he said.
Economic gains in the community depend on growth in the labor force, a major weakness for Fargo, according to Moody’s Analytics, which analyzes North Dakota’s economic picture for the state.
Pam Sharp, director of the state Office of Management and Budget, said there has been an outflow of labor from Fargo to out-state.
“Moody’s believes that won’t last through 2014,” Sharp said, as the oil boom moves from exploration to long-term production.
Dan Staller, market president of Starion Financial, presented findings of the survey, an effort by the Chamber, Starion and North Dakota State University’s Department of Management and Marketing.
Staller said partnerships between businesses and colleges, especially tech schools, have been formed to address the workforce issue. Internships are also on the rise, he said.
“More businesses are starting to look at offering internships to local college students in an effort to pull them in,” Staller said.
Gartin said retraining underemployed college graduates is part of the solution, as is automation and immigration.
The state also needs to tell its story better to attract workers, he said.
“No one comes to a market that is kind of unknown unless they feel that they not only have a great opportunity with that new job but that they also have a great opportunity if something happens on that new job,” Gartin said.
Panelists agreed improving the arts scene is important in creating a quality of life that attracts workers.
Exposure to volatility in agriculture prices is another weakness for Fargo, according to Moody’s.
The recent drop in commodity prices is a current bleak spot for the state and local economy.
It not only has reduced personal income levels but has slowed ag-related manufacturing, Gartin said.
Gartin said non-agriculture manufacturing is still going strong. He expects to see continued growth in back office, technology and IT and life sciences sectors, as well as entrepreneurship.
Readers can reach
The 2014 Business Outlook Survey results are available at www.fmwfchamber.com
Forum Business Editor Sherri Richards at (701) 241-5556