By KELLY CAMPBELL, special to LTW
Editor’s note: Local Tech Wire asked Kelly Campbell, founder and chief executive officer of Raleigh-based , to sum up what he heard at the capital markets program in RTP on Wednesday. Interface is a custom software development firm. Campbell is a board member with the ACG Triangle chapter.
RESEARCH TRIANGLE PARK, N.C. – Bruce Bittles, chief investment strategist at R.W. Baird & Co., provided the keynote address on the state of the capital markets to a room of over 100 local and regional executives, investment bankers, private equity players and other professionals Wednesday morning.
The event was hosted by the Raleigh Durham chapter of the Association for Corporate Growth (ACG). ACG is a mid-market growth and deal making organization with 54 chapters and over 12,000 members worldwide.
Bittles painted a fairly bleak picture for the current state of the national economy.
He predicted a jobless recovery, with the unemployment rate remaining high for the next two to three years.
Bittles also believes that the historical levels of government debt is acting as an anchor on most aspects of the overall economy, slowing and even hampering efforts by the Federal Reserve to stimulate growth.
Further, Bittles stated that de-inflation is a greater concern to him than inflation.
He believes the consumer savings rate will continue to rise, perhaps reaching 10 percent. While a healthy endeavor, this increase in savings will further reduce economic growth since consumer spending makes up 70 percent of our gross domestic product.
Capital spending by corporations was reported to be on the rise, but this will have a much smaller effect on growth since corporate spending is a much smaller percent of the overall GDP.
Bittles also pointed out that the current recession is likely to alter the psychology of a generation of consumers, much like the great recession did for a generation of our parents and grandparents.
In two panels that followed Bittles’ keynote speech, both merger and acquisition and raising capital panelists seemed unanimous in their view that companies looking for capital – whether equity or debt – will face greater scrutiny, especially those below $5 million in earnings before interest, taxes, depreciation & amortization (EBITDA).
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