Charlotte Business Leaders Expect Slowdown In 2020, Worry About China Trade

Dec 9, 2019

CEOs of some of Charlotte's biggest companies said Monday they expect U.S. economic growth to slow next year amid global trade wars and declining confidence among businesses and consumers. 

Those predictions came during the Charlotte Regional Business Alliance annual lunch at The Westin uptown, where five CEOs and an economist shared what they're thinking about business in 2020.

Darius Adamczyk of Honeywell, which moved its headquarters to Charlotte this year, said he's "little a bit nervous."

"On a base-level assumption, 2020 we're modeling as slightly worse than 2019, but not a recessionary environment." 

Adamczyk said he's concerned about interest rate trends that appear to foretell a recession. He's worried that the trade wars with China and other economies are hurting. But he also thinks ratification of a new U.S.-Mexico-Canada trade agreement and a possible trade deal with China could boost growth. 

CEO Brian Moynihan said Bank of America's own economists predict the U.S. gross domestic product - the total value of all goods and services produced - will grow just 1.7% next year, down from about 2% this year.

BofA economists expect the global economy to grow at about 3.1% next year, about the same as this year, and possibly faster in 2021. Moynihan said he's most concerned about China, where a slowdown could have worldwide effects.  

"The Chinese economy is big enough now, at 14 trillion (dollars) or so, it could actually hurt a lot if it keeps decelerating. So we need them to get back in the game. And that really comes back to Darius's point, you need the trade war to resolve in some way that both countries can get forward," Moynihan said. 

Moynihan said Bank of America analysts say the trade war with China and U.S. companies' decisions to cut back on purchases from there could trim economic growth there to below 6% next year for the first time in many years.

Uncertainty about China was also on the minds of other CEOs whose companies rely on Chinese suppliers, such as health care supplier Premier and home improvement retailer Lowe's. Marvin Ellison of Lowe's described U.S. trade policy as a major uncertainty.  But Ellison also sees a bright spot - strong consumer spending in the U.S., where Lowe's makes most of its sales.  

"The consumer's healthy. And as we look at 2020, we still have confidence that's gonna remain, with low unemployment, wages up, savings rates are up. And based on that, the customer is more apt to invest in their home," Ellison said. 

In addition, said Ellison, the average age of homes in the U.S. is rising, and that can only bode well for home improvement spending.

Other speakers at the lunch were Duke Energy CEO Lynn Good, Premier CEO Susan DeVore and PWC Economist Chris Benko.