Despite presenting a somber snapshot of some segments of the global economy Tuesday, J.B. Penn, chief economist for Deere & Co., found one very bright spot.
“The ag sector is booming; it is doing well,” he said during the Quad-Cities Chamber of Commerce’s annual Economic Forecast at the Putnam Museum, Davenport. “And farmers have managed their debt, very, very well.
“Farm balance sheets have never been stronger.”
Penn, a former undersecretary for farm and foreign agricultural services for the U.S. Department of Agriculture, shared a comprehensive view of the global, national and Midwest economies during his message.
He said uncertainty is a key part of the economy, both worldwide and at home. “Recovery is occurring but it’s very fragile,” he said.
He said 2012 offered some peril, “and this year is the same way, maybe more.”
In particular, he focused on the U.S. political scene.
“There is the continued uncertainty in Washington, and something has to be done,” he said.
“All of this uncertainty is a real drain on the domestic economy.”
While lawmakers face decisions about debt and spending cuts, a major global transformation is taking place. Concerns he mentioned included the debt crisis in Europe, a critical need for China for begin encouraging better consumer spending, and political upheaval in the Middle East and North Africa.
“We’ve got a lot of uncertainty, and I think that will be the norm for a while,” Penn said.
On the positive side, Penn shared data that showed U.S consumer sentiment improving overall.
“We may be far away, but we are headed in the right direction,” he told the audience. “Despite the gloomy tone, I am optimistic.”
He also is optimistic about the housing sector, with 1 million housing starts anticipated this year, up from 800,000 last year.
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In addressing the audience before Penn’s speech, chamber CEO Tara Barney noted the strong Quad-City foundation in manufacturing, logistics and defense-related industries. In 2000, she said, area wages averaged 84 percent of the national wage; in 2011, that had risen to 97 percent.
Members of the audience agreed afterward with Penn’s assessment.
“I think it was wonderful, even though, unfortunately, every year is a bit pessimistic,” said Heather Roberts, business development coordinator for MetroLINK, Rock Island.
“It was good information, encouraging and optimistic,” said Kathy MacBeth, technical sales representative for Peoria Disposal Co., Bettendorf. “I thought he did a great job of pointing out what needed to be addressed.”