Calm amid the storm
When it comes to the health of the economy, corporate leaders have a brighter outlook than the average cube-dweller
Leaders of Massachusetts' top companies aren't panicking about the economy. Yet.
Despite the pain of the credit crunch and a gathering recession, as many chief executives of Bay State companies expect the US economy to be better by next year as expect it to be worse: 36 percent each way, according to the Globe 100 chief executive survey. Another 28 percent expect conditions to be about the same.
"My gut feeling is that the economy, in the second half of the year, is going to rebound," says Bob Weiler, chief executive of Phase Forward Inc., a Waltham company that makes software used in clinical trials of drugs. Referring to tax rebates of up to $600 a person and $1,200 per couple due to land in mailboxes this month and multiple rounds of Federal Reserve interest rate reductions, Weiler says: "The national stimulus bill coming in May, the rate cuts beginning to hit - when that type of money hits the consumer, they'll feel better about their mortgages. They'll see the credit markets open up. And everything is relative. Things are just coming down from numbers that have been roaring so hot."
In one key sector of the Massachusetts economy, high technology, Weiler and many other chief executives expect an easier time than past downturns. "In the tech sector, this slowdown is different from the last slowdown," says Greg Strakosch, chief executive of TechTarget Inc., a Needham operator of 50 technology-related websites whose revenue jumped 20 percent last year, to $95 million, driving sales leads to companies such as Cisco Systems Inc., Dell Inc., EMC Corp., and SAP AG. With such factors as federal accounting-disclosure and health-records regulations keeping demand strong independent of economic conditions, Strakosch says, "There's not a lot of froth in the IT market."
For a third year, participation in the Globe 100 survey has been offered to Boston .com readers, and it shows chief executives continue to be - or claim to be - more optimistic on almost all economic counts than the cubicle-dwellers and company-time Web-surfers they employ. Two differences: Boston .com readers expect a somewhat softer landing for real estate. And while both groups call the "high cost of living" Massachusetts' worst economic challenge, after that chief executives are most worried about high taxes, average folks about housing costs and energy.
One surprise is the state's first Democratic governor in 16 years, Deval L. Patrick, is rated by nearly 70 percent of chief executives and workers alike as having "no noticeable impact on the state's business climate." Patrick, who has struggled to get an agenda through the Legislature, also is having a hard time translating his corporate experience into meaningful results promoting the state economy.
"I think he's got the right ideas. I haven't seen a lot of impact yet," said Roger G. Little, founding chief executive of Spire Corp., a Bedford maker of tech gear used in two of Patrick's favorite industries, solar energy and biomedical products.
Little also is among the narrow majority of chief executives, 55 percent, who oppose Patrick's now-all-but-dead plan for three resort casinos: "I think there are better kinds of businesses to stimulate."
Jit Saxena, who founded and sold Westborough software maker Applix Inc. in the 1990s and now runs Netezza Corp., a fast-growing 300-person Framingham data technology maker, said what's most crucial is Patrick never take for granted the Bay State's brains-based innovation engine. "What makes the whole entrepreneurial phenomenon work in Massachusetts, building wealth, building communities," Saxena says, "is something politicians need to keep in front of them all the time."
