January 1, 2004
The Cure Forwhat Ails You
Joseph “J.W.” Williams’ business, Staircase & Millwork Co., provides high-end custom-made staircases, predominantly for upscale homes. Though a luxury item mainly for those with high disposable incomes, Williams still expects business to boom this year.
Staircase & Millwork’s creations sell for between $5,000-$25,000. “We bought the company two years ago,” says Williams, 33. “At that time, annual sales were about $5.5 million, and they’re still around that level. For 2004, though, our target is $8.4 million, and we could even top that if the economy improves.”
An expanding economy would put more money in the pockets of homebuyers and homeowners, who might decide to invest some of that cash in their homes. If that’s the case, Williams and his business partner, Eric Trope, are prepared.
“We’ve improved our production processes and upgraded our sales force,” says Williams, president of the Alpharetta, Georgia-based company. “From a low of 20 employees, we’ve increased our workforce to 35, mainly by hiring skilled craftspeople. We’re working on improving our manufacturing with both external consultants and employee training.”
Can Williams and other business owners get the economic surge they need to send profits through the roof? Members of the BLACK ENTERPRISE Board of Economists and other experts say national expansion will continue, although this year’s growth rate is far from certain. Inflation and interest rates are likely to remain low, experts say, and we might even see some job creation-most of which is good for businesses like Staircase & Millwork.
ON THE GROWTH TRACK
The economy is on track for a bit of growth-for a short while at least-with most of the major economic indicators looking up. But Thomas D. Boston, a professor of economics at Georgia Tech who heads the Boston Research Group in Atlanta, expects the economy to lose steam in 2004. According to Boston, the economy grew slightly more than 1% during the first quarter, 3.3% during the second quarter, and 4.8% during the third quarter of 2003. He expects the economy to grow by at least 5% in late 2003 and early 2004 before petering out by the end of next year, partially due, he says, to an extremely large federal budget deficit-projected at $500 billion-that will put upward pressure on interest rates and slow down growth and investment.
Some economists say problems may arise sooner, citing a continuously sluggish job market. “I think that will slow the economy in the first half of 2004. Consumers will cut their spending, reacting to poor job prospects,” says William Spriggs, executive director of the National Urban League Institute for Opportunity and Equality in Washington, D.C. The economist estimates growth in the 2.5%-3% range for 2004, mainly from increases in productivity. While not a recession, that range marks a slowdown from late 2003.
Bob MacIntosh, chief economist of Eaton Vance Management in Boston, is more optimistic. MacIntosh expects the economy to grow 4%-5% in 2004, as all the economic stimulus from tax reductions and interest rate cuts over the past few years start kicking in. “Business investing is picking up, showing