Monday Report - Public Private Partnerships
November 19th, 2007

Utah Economic Snapshot

Economic Notes:



Public-private partnerships as a development engine

Business and government should be partners, not rivals-let alone enemies.


  • Both economic growth and the eradication of poverty depend on the private sector's energy and drive. Business is the engine of all successful development efforts.
  • But small-minded conflicts between business, government, and civil society can thwart these efforts. A new approach is needed.
  • Short-sighted companies make fundamental mistakes; enlightened self-interest should send business leaders to the development table.
  • There is too much mistrust of business; governments should have higher expectations of what it can deliver. Development that fails to leverage the best of business is development that aims too low.

When business, government, and civil society work together in public-private partnerships, our world works better. But mistrust and misunderstanding prohibit us from working together more often, and when that happens we all lose: business loses opportunity, government loses credibility, but society loses most of all.

Economic growth and our ambitions for the eradication of poverty depend upon the energy and drive of business and commerce. In fact, I cannot envision an effective development strategy that is free of or uninformed by the private sector. When we examine instances where development has succeeded, in every case business was the engine of development.

That is true because business kick-starts a virtuous economic cycle: new enterprises are formed, new jobs are created, new skills are gained, and incomes begin to rise. Soon growth and productivity follow, spurring more innovation and efficiency and generating the products and services that people want and need. And in parallel, people gain opportunity, empowerment, and dignity.

Of course it does not always work that way, and there are many reasons-well-chronicled reasons. But I want to suggest that what underpins all the causes of failure is partisanship, partisanship that prevents all of us from opening our minds to the possibilities of what each party can and must bring to achieve the goals of Monterrey.1 Although government, society, and business must be completely linked in reaching these goals, in reality we operate as partisans.

Partisanship is a failure of mind-sets: because we are too often at odds, we fail to explore avenues of cooperation, fail to work together. In short, we fail to see the simple truth that there is no hope for development without business, and in the long term there is no hope for business without development.

Let me start with business. The very vitality of the business sector is growth. Growth is demanded by shareholders, but, more important than that, it's what inspires workers. Today companies are relentless in pursuing new technologies, new product markets, and new economies. But as many of these product markets and countries are still developing, a new approach is required.

Companies that take a shortsighted view make fundamental mistakes. They make the moral mistake of seeing profits but not people. But they also make a management mistake, of investing only where there is a short-term return. They fail to build long-term markets and long-term opportunities-the crux of business success.

Enlightened self-interest should send business leaders to the development table to be co-architects of development strategies, to join in public-private partnerships, and, as may be appropriate, to engage in philanthropy. And I say to business leaders, don't do this under pressure; do it because you will be building stronger communities filled with prosperous citizens soon to be your employees and your customers.

As for governments, they cannot hope for development without business, and business needs them to be successful. Whenever we see evidence of the private sector driving development, in every single case government got the conditions right. Governments, and they alone, get to set these conditions-conditions that promote prosperity.

First of all, in the most underdeveloped economies, the aid and innovative financing provided by the rich countries can create the minimum threshold required for the private sector to truly prosper. It is only when these basic requirements are met that the virtuous cycle of development can take hold.

Then, too, in every country, government leaders set the framework for local entrepreneurship: for setting up businesses and closing them down, for formalizing economies. Further, governments set the framework for national competitiveness, protect workers, enforce contracts, and protect intellectual and other property rights.

And I believe that government also needs a mind- set shift. There is too much mistrust of the intentions of business and misunderstanding of the role it can play. I urge governments to have higher expectations of what business is capable of delivering: of how it can bring not only investment but also expertise and capabilities, of how it can not only provide enterprise but also help governments build infrastructure and deliver public goods. These may sound like excessively high aspirations, but development that fails to leverage the best of business is development that aims too low.

All of us need to raise our game. I know that many of the government reforms I speak of require courage and political risk. But I also know that most of the CEOs I meet are aware of that. There are many political statesmen, but in my encounters with corporate clients around the world I see more and more businessmen becoming statesmen, too. Growing evidence suggests that the partisan mind- sets threatening cooperation can become something of the past. So I urge governments, as well as my fellow business leaders, to embrace the opportunity to act in our enlightened self-interest and to work together in the spirit of real partnership.

Source: McKinsey & Company

This Weeks Leads

We can only hope!
  • Legal Sea Foods
  • Legal Sea Foods, Inc. trades as Legal Sea Foods at 31 locations throughout FL, MA, MD, NJ, NY, RI, VA and Washington, DC.
  • The seafood restaurants occupy spaces of 4,000 sq.ft. to 8,000 sq.ft. in malls, as well as downtown/urban and freestanding locations.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • The company prefers to place locations in upscale business and tourist areas.
  • For more information, contact
    • Richard Heller,
    • Legal Sea Foods, Inc., O
    • ne Seafood Way,
    • Boston, MA 02210;
    • 617-530-9000,
    • Fax 617-530-9810;
    • Web site: www.legalseafoods.com.
  • Mountain Mike's Pizza
  • Concept Acquisitions, LLC trades as Mountain Mike's Pizza at 128 locations throughout CA, NV, OR and UT.
  • The restaurants occupy spaces of 3,000 sq.ft. to 3,500 sq.ft. in specialty and strip centers.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • Typical leases run 15 years.
  • For more information, contact
    • Brad Gordon,
    • Concept Acquisitions, LLC,
    • PO Box 950459,
    • Lake Mary, FL 32795;
    • 407-322-1781;
    • Web site: www.mountainmikes.com.
  • Cato Fashions and It's Fashion
  • The Cato Corp. trades as Cato Fashions and It's Fashion at 1,250 locations nationwide.
  • The value- priced women's apparel stores occupy spaces of 4,000 sq.ft. to 5,000 sq.ft. in strip centers.
  • Growth opportunities are sought nationwide during the coming 18 months.
  • Preferred demographics include a trade-area population of 20,000.
  • For more information regarding expansion throughout AZ, CO, KS and NM,
  • contact
    • Gary Smith,
    • 972-624-0749;
    • Email: gesmi@catocorp.com.
  • Benihana
  • Benihana, Inc. trades as Benihana at 81 locations nationwide.
  • The Japanese restaurants occupy spaces of 7,500 sq.ft. in freestanding locations.
  • Plans call for eight openings nationwide during the coming 18 months.
  • Preferred demographics include a population of 250,000 within five miles.
  • For more information regarding expansion for Benihana, contact
    • Kevin Murray,
    • Benihana, Inc.,
    • 8685 Northwest
    • 53rd Terrace,
    • Miami, FL 33166;
    • 305-593-0770,
    • Fax 305- 592-6371;
    • Web site: www.benihana.com.


Public Private Partnerships

  • Business and government should be partners, not rivals-let alone enemies.

Utah Jobs

  • Where the are
  • What they are!
  • What kinds of New Jobs

Utah Economic Snapshot

Bob Springmeyer

Bonneville Research

  • Utah Economic Snapshot
  • Utah Labor Market Indicators - Oct 2007 (Sep 07)

    • Employment Growth: 4.3% (4.4%)
    • Employment Increase: 52,500 (53,500)
    • Unemployment Rate: 2.7% (2.7%)

    Source: Utah Dept of Workforce Services, 11/13/07

    U.S. Labor Market Indicators - Oct 2007 (Sep 07)

    • Employment Growth: 1.2% (1.2%)
    • Unemployment Rate: 4.7% (4.7%)

    Source: Utah Dept of Workforce Services, 11/13/07

    Where Are the New Jobs? - Sep 2007

    • State Total (Market Share) - 52,500 +4.3%
    • Salt Lake County (48%) - 24,581 +4.2%
    • Utah County (15.1%) - 11,406 +6.3%
    • Davis County (8.2%) - 2,933 +2.9%
    • Weber County (7.6%) - 2,633 +2.8%
    • Washington County (4.3%) - 1,955 +3.7%
    • Cache County (4.0%) - 1,694 +3.5%
    • Summit County (1.6%) - 1,541 +8.0%
    • Box Elder County (1.6%) - 1,362 +6.9%
    • Uintah County (1.2%) - 1,230 +9.0%
    • Tooele County (1.3%) - 1,201 +8.0%
    • Iron County (1.4%) - 739 +4.2%

    Source: Utah Dept of Workforce Services, 11/13/07

    What are our new Jobs? - Oct 2007

    • State Total - 56,822 +4.7%
    • Specialty Trade Contractors - 7,700 +11.2%
    • Health Services and Social Assistance - 4,300 +4.1%
    • Accommodation and Food Services - 3,800 +4.3%
    • Professional, Scientific, and Technical Services - 3,100 +65.0%
    • Finance and Insurance - 2,900 +5.3%
    • Unemployed - 2,800 +2.9%
    • Administration & support & Waste Mgm't & Remediation - 2,100 +2.9%
    • Heavy and Civil Engineering - 1,700 +17.2%
    • Ambulatory Health Care Services - 1,700 +3.9%
    • computer and Electronic Products - 1,400 +12.1%

    Source: Utah Dept of Workforce Services, 11/13/07

    Economic Snapshot - First Four Months FY2008

    Utah State Government

    • Sales and Use Taxes (Gen Gov't) +1.2%
    • Individual Income Taxes (Education) +8.1%
    • Individual Income Tax Withholding (Education) +10.9%
    • Corporate Franchise Taxes (Gen Gov't) -11.7%
    • Motor Fuel Taxes (Transportation) +1.3%
    • Severance Taxes (Gen Gov't) -10.7%
    • Wine and Liquor Taxes (Education) -49.4%

    Source: Utah State Tax Commission, TC-23 11/14/07

    Economic Snapshot - First Four Months FY2008

    Local Government

    • Local Sales and Use Taxes +6.3%
    • Tourism, Recreation, Cultural, Convention +23.2%
    • Public Transit +44.0%

    Source: Utah State Tax Commission, TC-23 10/15/07

  • Economic Notes:
    • Business Confidence
    • US business confidence remains moribund. Sentiment has not changed appreciably since plunging in August during the height of the subprime financial shock, and it remains consistent with an economy that is expanding very slowly. Businesses are particularly dour in their broad assessment of current conditions and expectations regarding the six- month outlook. Businesses are more upbeat when responding to more specific questions regarding payrolls and equipment investment. Confidence is stronger outside the U.S., most notably in Asia. Sentiment is weakest among firms in housing and financial services, and strongest among high-tech businesses.
    • Treasury Budget
    • The unified deficit for October was $55.6 billion, smaller than the CBO's preliminary estimate. This was 13% greater than the unified deficit in October 2006.
    • Import and Export Prices
    • The U.S. Import Price Index increased 1.8% in October. The increase was led by a 6.9% increase in petroleum prices. Export prices rose 0.9% in October, after rising by 0.3% in the previous month.
    • International Trade (FT900)
    • The nominal U.S. trade deficit in goods and services narrowed by 0.6% in September. The U.S. trade deficit came in at $56.5 billion, $0.4 billion less than August's revised $56.8 billion, according to the Bureau of Economic Analysis. In September, both exports and imports increased, while exports increased more than imports. The goods deficit with China, widened 3.8% compared to a year ago to $23.8 billion. Crude oil prices increased in September, however, the nation's total import bill for energy- related petroleum products decreased to $27.1 billion.
    • ABC News/Washington Post Consumer Comfort Index
    • Rising gasoline prices, weakening housing markets and slower job growth are weighing on consumer moods. According to the ABC News/Washington Post consumer comfort index, sentiment dropped two points to -17 in the week ending November 11. A four-point decline in the buying climate led the overall charge lower while the other two main components were unchanged this week.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 5.5% in the week ending November 9. Purchase applications increased by 4.8% and refinance applications increased 6.4%. This volatile index often rebounds from a down week by posting gains, yet the refinancing numbers may be an indication of a trend that will extend into next year.
    • Pending Home Sales
    • The outlook for home sales remains dire in the near term. The pending home sales index rose slightly to 85.7 in September. This is only an increase of 0.2% from August, but a decline of 20.4% from a year ago. The index's large fall from a year ago suggests that home sales will slow further over the next several months in light of continued weakness in the nation's housing market.
    • CPI
    • The seasonally adjusted consumer price increased 0.3% in October, after rising 0.3% in September and falling 0.1% in August. A main contributor to the increase in consumer prices was the energy component, which rose by 1.4% in September. The core index, which excludes food and energy prices, increased by 0.2% in October, which is unchanged from the previous two months. Over the past year, core CPI inflation has run at a 2.1% rate on a seasonally adjusted basis, unchanged from the previous month. Both the topline and the core readings were in line with consensus expectations.
    • Business Inventories (MTIS)
    • Total business inventories came in on expectations, increasing by 0.4%. Inventories at retailers were up 0.1% for the month. Total business sales were up 0.6%. The total I/S ratio was unchanged, remaining at 1.27.
    • PPI
    • Producer prices for finished goods rose by a slight 0.1% in October, as prices for finished energy products unexpectedly gave up some of their September gains. Prices for food products continued to rise rapidly (1.0%). At earlier stages of processing, core crude producer goods rose strongly for the third month in a row.
    • Retail Sales (MARTS)
    • Total retail sales rose 0.2% in October, the weakest growth since June, after rising 0.7% in September. Non-auto sales also rose 0.2%. Sales at gasoline stations led growth. Core sales grew 0.1%. Large declines were posted at nonstore retailers, furniture stores and department stores. Growth in September was revised up from 0.6%. Year-over-year growth rose to 5.2% in total and excluding autos.
    • Chain Store Sales
    • Chain store sales fell 0.5% in the week ending November 10, but year-over-year growth rose to 2.7% as comparisons eased according to the ICSC. Colder weather reportedly boosted apparel demand.
    • Oil and Gas Inventories
    • Crude oil inventories rose by 2.8 million barrels for the week ending November 9, according to the Energy Information Administration, above expectations. Distillate supplies fell by 2.0 million barrels, more than expected. Gasoline supplies rose by 0.7 million barrels, above expectations. Refinery activity rose noticeably to 87.7%. Today's report is bearish.

    Source: Economy.com 2007

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