Bank of America’s West Michigan operations had a record year in 2018 in terms of the number of new business clients. The year came on top of similar results in 2017, when the bank consolidated local operations into a single office in downtown Grand Rapids, a move that better organized and generated greater collaboration among staff in pursuing new business. Echoing the sentiment of other local executives, Tabben said business clients are working to cope with the region’s tight labor market.
What’s the biggest opportunity for Bank of America in 2019?
Our biggest opportunity is to continue the conversation with new relationships, whether they are individuals or companies or the larger institutions. The business banking space is alive and well and thriving, and I think that continued conversation about what does it mean to your business, what does it mean to you personally, what does it mean to your employees will continue to drive more client acquisition. We’re so optimistic about that, and we continue to hire locally to fuel that effort.
What do you see the economy doing next year?
Our global research team … is thinking about GDP growth of about 2.9 percent when it’s all said and done in 2018, and slightly slower growth for 2019, but very close on the heels of 2018 at 2.7 (percent). U.S. consumer sentiment continues to be extremely strong, we have low unemployment, people’s wages are growing — and we’re hearing that from local business owners as well — and there’s reasonable levels of debt. The confidence among our small businesses is at record highs and we expect that to continue going into the new year with capital expenditures or other investments that they might make in people and technology to continue to drive that economic growth.
What do your business clients tell you about how they see 2019?
The skilled workforce continues to be a demand. I’m starting to hear more and more about the need for diversity locally. And I mean diversity in terms of experience and professional skills. How are we going to address and not lose ground with the changing leadership? The movers and shakers in West Michigan are all reaching a certain point in their life where they’re starting to go, ‘Who’s going to follow me? Who’s going to carry that torch?’
The immediate concern that I hear businesses talking about is things like skilled workforce. ‘We need skilled workers, I need more visibility, more certainty in terms of the ability to meet my obligations in terms of things I’m taking on.’ But long term, people are starting to ask about ‘what’s the leadership of 2020? What’s the leadership of 2025? And what does that mean both to my business and the legacy I want to leave?’
How’s the tight labor market affecting business for clients?
Locally, we are so fortunate to have a low unemployment rate, but because of a tight labor market, some business owners may pause to increase their inventory, they may pause to take on new contracts, they may pause to continue to expand at the pace that they are because they just don’t know if they can manufacture as much product with the amount of personnel that they have. It’s a double-edge sword.
What’s the effect of rising interest rates?
All things being equal, the cost of capital for both corporations and individuals may weaken demand for credit, but what we’re seeing on the commercial side is that the difference between paying for a loan today and paying for a loan a year from now, it’s really not materially enough to change demand. Where we anticipate there may be more hesitation or a little slowing down is a little bit on the individual side with the home equity loans, the home loans, the credit cards. But on the commercial side, it’s really not affecting decision-making at this time.
Anything specific that you’d like to see the incoming governor do in 2019?
I simply would say that like any partnership, the more frequent and thoughtful the conversation and the relationship, the better. West Michigan has very specific interests and needs for its business community, and the more that Gov. Whitmer can spend time with us, understand what we need, and continue to build upon what’s working, the better.
What’s a concern you have going into the new year?
Uncertainty leads to people standing still. It’s really important that whatever uncertainty we’re pointing to, whether it’s interest rates or labor markets or the future growth possibilities for our state, that we stop and pause and we understand that uncertainty and we not overweight it. We can’t stop moving forward and making progress. There’s a lot of noise, whether you want to say politically or societally, and my concern is people will give more weight to the noise than to what’s real. We are very fortunate to work in an economy here that is growing and thriving.
Interview conducted and condensed by Mark Sanchez.