This Daily Briefing is brought to you from the
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as a member benefit.
Businesses make money once again
11:16 a.m. Sunday, October 17, 2010
Many of Georgia’s businesses are expected to rake in the profits in the final months of 2010, despite continued gloom about the economy.
Wall Street analysts project that profits will be up by double-digit rates at most of Georgia’s largest publicly traded companies, and generally could match their profits in late 2007, when the worst recession in decades was just beginning.
Fourth-quarter profits at package shipper UPS, consumer products firm Newell Rubbermaid and money manager Invesco, for instance, are expected to be up more than 30 percent compared to last year.
Despite the profit rebound, there are still plenty of causes for worry about the economy in coming months, even though the recession officially ended 16 months ago.
Much of the profit growth is coming from earlier cost-cutting by companies rather than rising sales, say experts, and stubborn unemployment, mounting government debt and threats of a double-dip recession are feeding continued gloom.
Still, some business leaders and economists say there are signs that consumers are beginning to spend more and companies are beginning to sell more in the fourth quarter without the help of government stimulus spending or industry purchases to rebuild inventory.
Some small area businesses are also optimistic. Bob Budd gushes about Red Brick Brewing’s prospects in the fourth quarter even without sampling the Atlanta craft brewer’s goods.
“I don’t think we’ve ever had a quarter this good,” said Budd, president of Red Brick. He expects sales to jump 85 percent this quarter compared to last year.
Red Brick, which changed its name earlier this year from Atlanta Brewing Co., is getting a big boost from its Laughing Skull brand launched last year.
“That has really become the beer of Halloween,” said Budd. He said the company also is getting a longer-term boost from accelerating sales of artisan beers in general in the Southeast.
“We’re hoping to keep this ball rolling for the next couple of years,” he said.
‘Lean and mean’
The fourth-quarter outlook likewise seems stronger at many of Georgia’s largest companies.
Wall Street analysts expect profits at Georgia’s 20 largest companies by market value to rise about 29 percent as a group in the last three months of this year compared to the same period last year.
If the expected surge in profits materializes, those companies once again will be making profits at pre-recession levels. The 20 companies’ fourth-quarter earnings, on average, are expected to beat profits during the same period in 2007 by about 2 percent.
However, much of the profit growth is due to aggressive cost-cutting during the recession. Large companies retooled operations, closed units and cut thousands of jobs over the past three years, allowing them to now produce profits even with lagging revenues.
“They’re lean and mean right now. ... They’ve cut a lot of labor costs,” said Don Sabbarese, director of Kennesaw State University’s Econometric Center. He said companies flush with cash also have been investing in software and machinery to boost efficiency. But so far that capital spending hasn’t translated into new hiring that would help reduce unemployment and speed up the economic recovery. Jobless rates were 9.6 percent nationally in September and 10 percent in Georgia in August, the latest month available.
“The problem is [companies are] not willing to invest in human capital,” said Sabbarese.
He fears Georgia’s smaller companies also will lag in the recovery because of the concentration of more than 40 bank failures in the state in the past two years.
“The biggest source of credit for small businesses is small banks,” he said.
Still, he said some sectors of Georgia’s economy have been growing enough this year to boost hiring, including health care, education and hotels. Manufacturers also have been boosting output, but are slowing down and still shedding jobs, he said.
Trends boost optimism
Economist Jeffrey Humphreys believes such slowdowns may be temporary blips due to the end of much federal stimulus spending and inventory restocking by businesses earlier this year. The director of the University of Georgia’s Selig Center for Economic Growth predicts that the erratic economy will soon be steadied by more predictable growth fed by customer demand, lower long-term interest rates and stronger exports.
“Exports look really good in the fourth quarter,” he said. “Manufacturing I think is beginning to perk up.”
He also predicted “a reasonably good Christmas” for retailers, who make the bulk of their profits during the holiday season.
“Not every sector is doing well, and some are doing badly,” he said, but “it’s hard to justify the level of pessimism that’s out there.”
Added Humphreys: “I guess coming out of the worst recession since World War II does some damage to the psyche not only of consumers but of business leaders.”
Still, some local business leaders are optimistic about recent trends.
“We see sales are getting much better,” said Tim Walker, with Stevi B’s Pizza. The Marietta-based pizza chain has 43 restaurants in several states.
Walker, Stevi B’s senior vice president of finance, said the company grew during the recession and is speeding up that growth this year. It expects to open as many as eight restaurants this year, up from about five last year.
And while Walker said he does worry about rising flour and dairy costs and the possibility of a double-dip recession, so far things are looking good.
Fourth-quarter revenues are expected to grow 5 percent compared to last year due to increased customer traffic.
High unemployment may have shrunk the pool of potential customers, but the company is getting more business lately from the roughly 90 percent who still have their jobs, said Walker.
“They are eating out more,” he said.
The Atlanta Journal-Constitution
Many of Georgia’s businesses are expected to rake in the profits in the final months of 2010, despite continued gloom about the economy.
Wall Street analysts project that profits will be up by double-digit rates at most of Georgia’s largest publicly traded companies, and generally could match their profits in late 2007, when the worst recession in decades was just beginning.
Fourth-quarter profits at package shipper UPS, consumer products firm Newell Rubbermaid and money manager Invesco, for instance, are expected to be up more than 30 percent compared to last year.
Despite the profit rebound, there are still plenty of causes for worry about the economy in coming months, even though the recession officially ended 16 months ago.
Much of the profit growth is coming from earlier cost-cutting by companies rather than rising sales, say experts, and stubborn unemployment, mounting government debt and threats of a double-dip recession are feeding continued gloom.
Still, some business leaders and economists say there are signs that consumers are beginning to spend more and companies are beginning to sell more in the fourth quarter without the help of government stimulus spending or industry purchases to rebuild inventory.
Some small area businesses are also optimistic. Bob Budd gushes about Red Brick Brewing’s prospects in the fourth quarter even without sampling the Atlanta craft brewer’s goods.
“I don’t think we’ve ever had a quarter this good,” said Budd, president of Red Brick. He expects sales to jump 85 percent this quarter compared to last year.
Red Brick, which changed its name earlier this year from Atlanta Brewing Co., is getting a big boost from its Laughing Skull brand launched last year.
“That has really become the beer of Halloween,” said Budd. He said the company also is getting a longer-term boost from accelerating sales of artisan beers in general in the Southeast.
“We’re hoping to keep this ball rolling for the next couple of years,” he said.
‘Lean and mean’
The fourth-quarter outlook likewise seems stronger at many of Georgia’s largest companies.
Wall Street analysts expect profits at Georgia’s 20 largest companies by market value to rise about 29 percent as a group in the last three months of this year compared to the same period last year.
If the expected surge in profits materializes, those companies once again will be making profits at pre-recession levels. The 20 companies’ fourth-quarter earnings, on average, are expected to beat profits during the same period in 2007 by about 2 percent.
However, much of the profit growth is due to aggressive cost-cutting during the recession. Large companies retooled operations, closed units and cut thousands of jobs over the past three years, allowing them to now produce profits even with lagging revenues.
“They’re lean and mean right now. ... They’ve cut a lot of labor costs,” said Don Sabbarese, director of Kennesaw State University’s Econometric Center. He said companies flush with cash also have been investing in software and machinery to boost efficiency. But so far that capital spending hasn’t translated into new hiring that would help reduce unemployment and speed up the economic recovery. Jobless rates were 9.6 percent nationally in September and 10 percent in Georgia in August, the latest month available.
“The problem is [companies are] not willing to invest in human capital,” said Sabbarese.
He fears Georgia’s smaller companies also will lag in the recovery because of the concentration of more than 40 bank failures in the state in the past two years.
“The biggest source of credit for small businesses is small banks,” he said.
Still, he said some sectors of Georgia’s economy have been growing enough this year to boost hiring, including health care, education and hotels. Manufacturers also have been boosting output, but are slowing down and still shedding jobs, he said.
Trends boost optimism
Economist Jeffrey Humphreys believes such slowdowns may be temporary blips due to the end of much federal stimulus spending and inventory restocking by businesses earlier this year. The director of the University of Georgia’s Selig Center for Economic Growth predicts that the erratic economy will soon be steadied by more predictable growth fed by customer demand, lower long-term interest rates and stronger exports.
“Exports look really good in the fourth quarter,” he said. “Manufacturing I think is beginning to perk up.”
He also predicted “a reasonably good Christmas” for retailers, who make the bulk of their profits during the holiday season.
“Not every sector is doing well, and some are doing badly,” he said, but “it’s hard to justify the level of pessimism that’s out there.”
Added Humphreys: “I guess coming out of the worst recession since World War II does some damage to the psyche not only of consumers but of business leaders.”
Still, some local business leaders are optimistic about recent trends.
“We see sales are getting much better,” said Tim Walker, with Stevi B’s Pizza. The Marietta-based pizza chain has 43 restaurants in several states.
Walker, Stevi B’s senior vice president of finance, said the company grew during the recession and is speeding up that growth this year. It expects to open as many as eight restaurants this year, up from about five last year.
And while Walker said he does worry about rising flour and dairy costs and the possibility of a double-dip recession, so far things are looking good.
Fourth-quarter revenues are expected to grow 5 percent compared to last year due to increased customer traffic.
High unemployment may have shrunk the pool of potential customers, but the company is getting more business lately from the roughly 90 percent who still have their jobs, said Walker.
“They are eating out more,” he said.
Extra tag fee would expand trauma network‘Yes’ vote would add $10 charge to upgrade state's emergency care
Gainesville Times October 17, 2010
Come Nov. 2, Georgians will have to decide if they are willing to tack an additional $10 to their annual car registration fees to support expanding the state's trauma care network.
"The No. 1 cause of trauma in Georgia is car crashes; however, trauma injuries can happen in a variety of ways," said Deb Battle, Northeast Georgia Medical Center Trauma Program manager. "Trauma can occur from situations like falling off a four-wheeler or having a workplace accident."
In 2007, the Georgia General Assembly established the Georgia Trauma Care Network Commission to create a statewide trauma system and to administer trauma funds appropriated annually.
In 2009, the commission came up with a five-year plan to not only increase the number of trauma care centers in the state — currently there are 16, and experts say we need at least 30 — but to also devise potential funding sources.
According to the plan, the best funding source is one that is "trauma-related, sustainable and expands with population growth." Since motor vehicle crashes account for many trauma injuries, an annual $10 fee per vehicle is an ideal funding source, the commission says.
If voters approve the amendment to the state constitution, officials expect the initiative to raise about $80 million annually. The amendment specifies the fee would be deposited monthly into a trauma trust fund and would be used only for the trauma network. Additionally, the money would remain in the account, not roll over to the state's general fund, at the end of each fiscal year.
"This isn't just paying hospitals to take care of trauma patients; it's paying for the additional equipment and education for staff," said Dr. Priscilla Strom, a general surgeon with The Longstreet Clinic and the medical center's trauma services director.
"Part of being a designated trauma care center is having the proper people who are trained to handle trauma cases and the necessary equipment and facilities available 24/7.
"One of the big things that the commission is looking to do is develop an integrated trauma system, so there is consistency from county to county. We need statewide EMS protocols about deciding who needs to go to what hospital, so that we don't overwhelm the trauma facilities we do have."
While the medical center can handle certain trauma cases, it is not a designated trauma care center. There are four different types of trauma centers, from level one to level four - with level one being the highest. In order to be an official trauma care center, facilities must meet specific criteria and be certified by the Georgia Department of Human Resources.
For example, to be considered a level one trauma care center, facilities must be able to handle any time of trauma case and must also be a teaching facility for medical students.
The closest trauma centers to Hall County are the Gwinnett Medical Center and Grady Memorial Hospital in Atlanta.
Six of the state's 16 trauma care centers are found primarily in the metro Atlanta area, which is good news if you get injured near one of them but not so good if you happen to be located in the southern half of the state. Once you travel below Bibb County, there are only three designated trauma care centers: one each in Chatham County, Thomas County and Muscogee County.
"We're a very mobile society. We live, play and work throughout the state," Battle said. "If you're driving towards the mountains, or out towards Hilton Head Island, there are very limited trauma care resources."
Proximity to a trauma care center can make the difference between life and death. For optimal survival outcomes, medical officials say it's important that individuals with a traumatic injury get to a facility within an hour - 30 minutes for children.
"It's important for people statewide to have good access to trauma care," Strom said. "There aren't a lot of trauma care centers in the southwest and southeast portions of the state. That's something people need to think about, especially if they plan on doing any traveling."
Not everyone is in favor of the proposed amendment.
"Last year, (the legislature) passed the super speeder law and added an additional (fee) to speeding fines," said Brett Bittner, operations director for the Libertarian Party of Georgia. "Revenue from that has fallen short of what they expected and this seems to be a second attempt to make it happen.
"Even if the money is used just for trauma care, we haven't seen any plans about how the money will be spent. In terms of raising taxes and additional fees, we're going to oppose them because we feel like (the government) should be able to do what they need to with the money that's already being raised through other forms of taxation and fees. We're already overtaxed at all levels of government as it is."
While the state's Libertarian party opposes raising taxes and fees, medical officials say it's important to find a way to fund improvements to the state's trauma care network.
"Taking care of trauma patients is very expensive. It's like that fire truck parked in a bay at the fire station. You may not need it often, but it has to be ready 24/7 just in case," Battle said.
"It's the same with trauma care. You have to have all those players and all that equipment standing by. An improved trauma care network means better outcomes. It means that no matter where you are hurt in Georgia, you can get access to quality trauma care."
Vote yes on Amendment 2
Macon Telegragh 10-18-10 Op-ED
No one likes to think about the need for trauma care but it’s time that we did.
As an RN with many years experience working in emergency medicine, I am sadly aware of the critical shortages and enormous gaps in service in Georgia’s trauma care network. We don’t have nearly enough trained first responders, medical professionals, equipment or trauma centers located throughout the state to handle the life-threatening emergencies that happen every day.
In fact, Georgia only has 16 hospitals with trauma care centers, but we need at least 30 trauma centers to meet the needs of all Georgia citizens.
I am writing to strongly encourage Georgia voters to go to the polls Nov. 2 and pass Constitutional Amendment 2. For an annual car registration fee of just $10, a dedicated funding source will be established to fund trauma care. This is important, because money will not go into the state’s general budget, so it can’t be raided for any other purpose.
This small investment will help provide funding to train more first responders, critical nurses and doctors, upgrade more emergency rooms to trauma centers, and expand trauma care services across the state.
In a split second, we can all be seriously injured in a car crash, so we are all at risk. I’ve seen far too many lives lost because patients with injuries simply ran out of time. They weren’t close enough to a trauma center that offered critical and life-saving medical care. Excellent trauma care also increases the chance of better quality of life and independence for those who have suffered catastrophic injuries.
I support the Yes 2 Save Lives Campaign and urge Georgia voters to vote “Yes on 2.” I hope Georgia voters will join with me and vote “Yes on Amendment 2.”
Debra Kitchens is a registered nurse living in Macon.
POLITICAL NOTES: Georgians must choose between two flawed candidates for governor
Larry Peterson Savannah Morning News Created 2010-10-17 00:18
Stuck with Republican Nathan Deal and Democrat Roy Barnes, Georgians must choose between two seriously flawed candidates.
Yes, there is Libertarian John Monds.
He's smart and has some interesting ideas - but except maybe to siphon off enough votes to force a runoff, he's not a player.
So back to Deal and Barnes.
Despite the crossfire of mud, there's no hard evidence either is a crook. But there's a phrase that applies to both - "invites suspicion."
Take former U.S. Rep. Deal.
As a congressman, he lobbied state or local officials in matters affecting either a business he co-owns or his business partner, Ken Cronan.
He did so at least three times, using his chief of staff to set up meetings and shepherd along proposals. Deal himself attended some meetings.
Last week, his aides justified his most recent intervention on the grounds it was for a constituent.
The constituent, they said - no one knows whether it was with a straight face - was Cronan.
On top of all that comes Deal's awkward management of his personal and family financial woes.
He's repeatedly amended his financial disclosures - and his explanations of a fiasco that may have led him to the brink of bankruptcy.
Barnes likely gloats at such stuff, but shouldn't.
In 1992, the Atlanta Journal-Constitution said 83 percent of his judicial appointees or their close associates donated to his campaigns. In at least two cases, checks were written shortly before judges were named.
After he left office, Barnes' law firm - its income is his income - continued to cash in on them. It represented clients in three dozen cases before his judges, including some campaign contributors.
Those cases yielded judgments totaling hundreds of millions of dollars.
In his 2002 campaign, he took at least $350,000 in campaign cash from lobbyists. He later denounced them, then briefly became one but now eschews their money.
Seemingly following a weather vane rather than a compass, he's also flip-flopped on other issues. A partial list: abortion, the state flag, taxes, illegal immigrants, his party and the president.
There's lots more to say about both candidates, but you get the idea.
Meanwhile, they seem to be pandering to voters rather than grappling publicly with the grim fiscal realities Georgia faces.
Barnes has proposed more than $2.2 billion in new spending programs and tax cuts, but has struggled to explain how he'd pay for them.
Deal wants to cut taxes by nearly $1.6 billion, but won't spell out what cuts he'd make to balance the budget.
Barnes tosses out fuzzy math and the prospect of what amounts to new taxes. On whom, we mostly don't know.
Deal says tax cuts will create jobs - and new revenue.
Maybe, but not right away - when the budget must be balanced. Sorry, Nathan; There's no Revenue Fairy.
In the near term, the money just won't be there for big new programs or major tax cuts. That's something both candidates balk at publicly conceding.
How did we get to this sorry state?
Deal, baggage and all, was the last one standing after a bruising GOP war of attrition. Though similarly weighed down, Barnes is the guy Democrats think can win them back the governorship.
By now, many voters in both parties - not to mention independents - have lost whatever illusions they had about either candidate.
In the end, they'll likely hold their noses and go with the one who seems more or less to reflect their views.
Given the electorate's reddish hue, that seems to favor Deal.
But who knows? That's why we count the votes.
Still, we're stuck with one of them.
God help us all.
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