The Fed Springs into Springfield for Talks about the Local Economy

The Federal Reserve Bank of St. Louis sponsored an Economic Forum on July 18 with area bankers and business leaders to discuss the state of the Springfield, Mo., economy. Overall, meeting participants indicated that their outlook for their area economy is cautiously optimistic.

In a pre-event survey, almost half of the respondents indicated that local business conditions are stronger today compared with a year ago, and over a third indicated that profits will increase over the next year. Sixty percent thought local businesses will maintain or increase staffing levels over the next year, and 42 percent said they expect businesses to boost capital spending.

Springfield has experienced long periods of sustained growth due to its location, cost of living, recreational opportunities, its colleges and universities, and ongoing business initiatives. The region has a diverse economy, which insulates it from the economic peaks and valleys that other regions may experience. Additionally, Springfield attracts retirees from high-cost areas of the country who can substantially improve their standard of living because of the relatively low cost of housing. There are many major building and capital improvement projects under way in the region, including an airport.

The region’s unemployment rate has averaged 5 percent for the past 10 years. With the area’s work force fully employed, there were reports of labor shortages and upward pressure on wages. Fed Economist Mike Pakko also attended the forum and stated, "Springfield is one of the most rapidly growing metro areas in our district.  That's great news, but it brings its own set of challenges." Several stated the need to attract more manufacturing jobs to the region. Bankers voiced concern with the extent of competition in the financial services sector. There were also reports from participants from more rural areas that many of these communities have not enjoyed the kind of positive economic climate that Springfield has.

Overall, participants are generally optimistic about the outlook for the Springfield economy; however, a slowing housing market and elevated labor and energy costs are a concern.

Four to six economic forums are held annually throughout the St. Louis Fed’s seven-state District as a way for St. Louis Fed economists to hear first-hand reports on economic conditions in the region.

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