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Business leaders have mixed outlook

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A mixed outlook

Local business people expect higher profits but they're worried about an economic slowdown.

BY DAVID McPHERSON Journal Staff Writer | February 3, 2005

PROVIDENCE -- A new economic survey suggests that Rhode Island business people may be displaying split personalities these days.

On one hand, they expect to increase hiring and boost their profitability this year.

But on the other hand, they worry about a slowdown in the local economy and believe inflation could be a problem.

"Everybody's worried, but it's usually about the guy next door," explained Joseph P. Campanelli, president and chief executive officer of Sovereign Bank New England.

Campanelli yesterday presented the results of an annual economic outlook survey conducted by Sovereign in conjunction with the Greater Providence Chamber of Commerce. He unveiled the survey results at a Westin Providence breakfast that drew more than 400 local business people.

Among the survey's findings are:

Twenty-two percent of local business people believe the Greater Providence economy may weaken this year, up from 19 percent last year.

The percentage of those business people who believe there will be growth in the local economy this year (56 percent) is down from last year (71 percent).

Forty-three percent of business people said they expect to boost hiring this year, up from 36 percent last year.

Eighty percent of local consumers cite the cost of living in Greater Providence as a threat to the local economy.

The percentage of consumers who say their economic situation is better than a year earlier remained even from 2004, but those who said they were worse off rose from 25 percent to 30 percent.

"People are confident; they're just uncertain," Campanelli said.

A panel of four local business leaders discussed the survey results and what they see happening with the Rhode Island economy.

Charles T. Francis, president of the Rhode Island division of CB Richard Ellis, pointed to a strong commercial real estate market in Providence as a good economic sign.

He noted the recent $46.2-million sale of the One Financial Plaza office building downtown to a partnership that includes a General Electric pension subsidiary.

"Look at the institutional money and sophiscated investors investing in our city," Francis told the audience.

He predicted, "I think we will see much more of this, I think, as we go forward."

Edward M. Mazze, dean of the University of Rhode Island College of Business Administration, said Rhode Island needs to do a better job of "celebrating our successes."

He also advised, "We've got to look at ourselves much as a regional city rather than just a city in Rhode Island."

In an interview after the presentation, Jay S. Sidhu, chairman and chief executive officer of Sovereign Bancorp, praised Providence for having a diversified economy that does not rely on any single company or industry.

"Providence has clearly emerged as the number-two destination in New England," he said, behind Boston. "That's a fantastic position to be in."

From The Providence Journal

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