If there’s one thing the 15 business leaders participating in this year’s Year Ahead forecast agree on, it’s that 2020 is going to leave a mark – and a permanent one at that.
Some scarring is inevitable 10 months into a pandemic that has touched everyone in some fashion, whether losing a loved one, being laid off from a job or struggling to keep a business going. Cutting deeply as well was the Aug. 10 derecho, which tore a heartbreaking path of destruction through Corridor communities and left in its wake billions of dollars in damage to homes, businesses and crops.
As if that weren’t enough, the fight for racial and social equity and an election like no other – one that was still being vigorously contested as the CBJ went to press – heightened the sense of uncertainty about the country’s future direction and whether, and how, it can heal its wounds.
After a year like 2020, Corridor leaders are well aware of the challenges ahead. But with the promise of effective vaccines coming into view and the prospect of a slow return to some semblance of normalcy, most are hopeful and even confident that the region will emerge stronger, though forever changed.
“I don’t believe we’ll ever return to our pre-COVID normal,” said Kirkwood Community College President Lori Sundberg, adding that even so, she felt a sense of “cautious optimism” about the new year. “Rather, I believe we’ll settle into a new normal which will incorporate the silver linings of the pandemic as well as the retention of everything that worked and was good from our pre-COVID times.”
For some industries, like transportation and IT, 2020 offered opportunities industry leaders believe will continue into 2021. Brenda Neville, president and CEO of the Iowa Motor Truck Association, said she expected already “robust” demand for freight through the pandemic to continue into the new year. But, she said, as the economy reopens and consumers shop less and get out more, the bulk of those goods could shift to products related to energy consumption and manufacturing.
Technology also fared well in 2020, according to Brian Waller, president of the Technology Association of Iowa, with companies rushing to take operations remote, and the rise of telehealth services and online education.
“In 2021, we forecast an increased focus on digital transformation with companies adjusting their day-to-day operations,” Mr. Waller said, adding doing so would be critical to business recovery and growth. “IT must play a central role in shaping digital infrastructure, risk mitigation and cost optimization.”
Other industries, like construction, were hit unevenly in 2020, according to Vince Ellison, vice president and Iowa general manager for Knutson Construction, who is predicting “slow but continued economic recovery” next year.
“While we are seeing a slowdown in larger projects, we anticipate an increase in smaller improvement projects, especially in manufacturing, which is seeing increased demand for essential products, and in the office sector, which is preparing for workers’ return to the workplace,” he said.
For those hardest hit by the events of 2020, though, the climb back could be painfully slow.
“The one-two punch of the pandemic and the derecho will leave vulnerable populations reeling for years,” said Kristin Roberts, president and CEO of United Way of East Central Iowa, adding that the challenges of the year had stretched area nonprofits nearly to their breaking point, highlighting “the inequalities our communities face.”
“For many of our students, making the decision to attend college is a big one and in the best of circumstances, it can feel daunting,” Ms. Sundberg agreed. “Throw in a pandemic and a derecho and we find many students feel so overwhelmed, they are just opting to sit out.”
Marty Lenss, Eastern Iowa Airport director, said the nearly decimated air travel industry would rebuild, although with carriers to airports like CID resuming services on a smaller scale, ultra-low-cost airlines taking a lead, and states, communities and regions being forced to think differently going forward.
“One of my industry mentors use to say, ‘A good crisis/challenge is the mother of invention,’” he said, summing up the job ahead in what will clearly be a rebuilding 2021.
Hybrid approaches here to stay, even as pandemic recedes
Kirkwood Community College
As I look toward 2021, I feel a sense of cautious optimism. I don’t believe we’ll ever return to our pre-COVID normal; rather, I believe we’ll settle into a new normal which will incorporate the silver linings of the pandemic as well as the retention of everything that worked and was good from our pre-COVID times.
Higher education is not unique in comparison to others, and we’ll continue to have challenges into 2021. Nationally, community colleges took the biggest enrollment hit in all of higher education. This is not surprising as we are open door institutions serving some of the most challenged student populations. Many of our students are the first in their family to attend college and a growing percentage of our population is low income. So for many of our students, making the decision to attend college is a big one and in the best of circumstances it can feel daunting. Throw in a pandemic and a derecho and we find many students feel so overwhelmed they are just opting to sit out. Those are the very students who can benefit the most from Kirkwood and those are the ones we have an obligation to reach.
Locally, we see Kirkwood’s role as a partner to our communities and the region in the economic recovery and we stand ready to do whatever is needed.
I cannot wait for 2021 to see what it will bring. It almost certainly has to be better than 2020!
Get ready for the rebound
President & CEO
Collins Community Credit Union
2021 will be a year of recovery and discovery. With the “people helping people” philosophy deeply rooted in our mission, the credit union industry thrives on serving its members during these unprecedented times. As we watch the world get vaccinated, we can see the light, and patiently await consumer confidence to rebound and unemployment to decline.
Based on data, we anticipate interest rates will remain low, therefore, new home construction and purchases will be strong. As Iowans get back to work, the need for reliable transportation will become a priority, boosting the used auto market. As consumers realize the importance of preparing for the unexpected, lavish purchases will take a backseat, and building an emergency fund will become a primary focus.
In 2020, local businesses learned how to be agile and innovative to meet and exceed consumer demand. There’s no doubt we’ll continue to see closures, reorganizations and consolidations across many sectors, but the comeback is often stronger than the setback. As proven time and time again, Eastern Iowans are resilient. While the latest stimulus package will boost business in the short term, we’ll continue to see a shift in business models with more small and micro businesses popping up. Discovery will be synonymous with economic recovery.
The freight wave keeps on rolling
President & CEO
Iowa Motor Truck Association
With almost 80% of all Iowa communities relying on trucks for the delivery of daily essentials, trucks will continue to be very visible on Iowa roads in 2021.
In terms of freight demand, Iowa trucking company executives are cautiously optimistic as we move into 2021. Freight demand has been robust, and we believe that trend will continue in the months to come, although there is anticipation that there could be some shifts in the type of freight. Retail freight may slow down in the second half of the year compared to the torrid pace of the last six months. As we anticipate a return to social gatherings, along with more travel and opening of entertainment venues, there will be a slowdown in the buying of goods.
However, there is also an anticipation that other freight related to energy consumption and manufacturing will pick up later in the year. As with any new administration, there are always some “unknowns” that could impact the overall economy, which then impacts the movement of freight.
Every trucking company in Iowa is looking for qualified drivers and we anticipate this will continue well beyond 2021. The driver shortage coupled with a very tight insurance market and an extremely litigious environment for trucking creates tremendous challenges for every trucking company regardless of its size.
IT talent crucial as digital transformation continues
Technology Association of Iowa
This year highlighted the importance of information technology professionals as companies raced to secure business operations for a remote workforce while reimaging services for their customers. From increased access to telehealth services to online education, technology is the solution for all businesses’ ability to navigate these unprecedented times.
In 2021, we forecast an increased focus on digital transformation with companies adjusting their day-to-day operations. In doing so, C-level IT leadership will be critical for businesses as they map their recovery for future growth. IT must play a central role in shaping digital infrastructure, risk mitigation and cost optimization.
Organizations that fail to identify top IT leadership and include them in key business decisions undermine the digital infrastructure that enables all aspects of their business. The Technology Association of Iowa (TAI) is committed to providing educational resources and peer-networking opportunities for IT leaders statewide as they prioritize their business roadmap.
More competition, fewer workers make innovation crucial
President & CEO
New Leader Manufacturing
We’re looking forward to what 2021 will bring to New Leader Manufacturing and the Iowa manufacturing industry as a whole. Our operation at NLM is growing, both domestically and internationally, and we’re placing a strong emphasis on innovation and partnerships to lay the groundwork for that growth.
We’re seeing increased competition from European manufacturers trying to break into the North American market. And with the merger and acquisition trend in the United States reducing supplier choices, the manufacturing industry is at a critical juncture.
One of the biggest challenges and opportunities our industry is facing is the shrinking workforce. We need to get more students interested in the trades and we need to bring more diversity into this industry. We work closely with Kirkwood, the Advanced Manufacturing Sector Board, local middle and high schools and nonprofits to ensure students are introduced to all the career paths available to them. The traditional four-year degree isn’t for every student, and we need to make sure those conversations are happening. There are high-paying, rewarding careers waiting for students. NLM is positioning itself for exciting international and domestic growth, and we need skilled workers to get that done.
Smaller projects set to lead the way back
Vice President & Iowa General Manager
In 2021 we are expecting slow but continued economic recovery in the sectors we operate in, including education, health care and multifamily. While we are seeing a slowdown in larger projects, we anticipate an increase in smaller improvement projects, especially in manufacturing, which is seeing increased demand for essential products, and in the office sector, which is preparing for workers’ return to the workplace.
Like most industries, construction has had to pivot due to the pandemic, bringing much-needed improvements to an industry ripe for change. The adaption of technology and information sharing has greatly improved communication and decision-making for our owners, employees and partners.
Finally, we are interested in watching the changes and growth in downtown Cedar Rapids and look forward to being in the middle of the action as we open in the Smulekoffs Warehouse Building.
A giving spirit needed more than ever
President & CEO
United Way of East Central Iowa
2020 pushed local nonprofits to their limits, as many gave up their own sense of normalcy. In addition to delivering routine services, they also transitioned to new technologies and structures. It was at this point they were also being stretched nearly beyond their capacity to provide services for the increasing demand.
This past year highlighted the inequalities our communities face. The one-two punch of the pandemic and the derecho will leave vulnerable populations reeling for years. In the coming months, United Way of East Central Iowa will watch and support increasing needs for services surrounding these events, as we know that these needs won’t subside quickly.
As we look to 2021, the idea of returning to “normal” seems tempting. Nonprofits are tentatively looking forward to bringing back fundraising events, in the safest way possible, to help raise critical funds and awareness of their mission and services.
In this upcoming year, our community’s response to, and support of, the nonprofit sector will be essential. Just as we have seen local restaurants and businesses struggle with income loss, our nonprofits, already in the vise of 2020, will feel the clamp turn even tighter. This is where you can make an impact. Please consider supporting your passion, whether through a gift of finances, a gift of advocacy or a gift of volunteering – you are needed.
Adjustments underway, but talent demand still strong
Director of Market Operations, Industrial & Iowa
We are feeling very optimistic heading into the new year. We’ve been extremely fortunate to remain busy in 2020 and look to continue to be in 2021.
Our biggest challenge at Aerotek is finding enough of the right candidates for our clients’ needs. We keep an eye on market trends, while using supply and demand tools to consult with our clients so they can continue to adapt and evolve as the market does.
What used to be a competitive starting wage in the past is now “standard” for many industries, which has made finding the right skill a challenge at times. Fortunately, we are seeing positive trends that there will continue to be many jobs for those looking for work – an exciting development coming after such a difficult year for many.
Tough economic, rate environments present challenges
As we head into 2021, the pandemic will continue to be top of mind and banks may have to navigate through a more challenging economic and interest rate environment. I believe that institutions like U.S. Bank that are well-reserved, well-capitalized and whose liquidity is strong will be in a positive position to serve its customers.
Additionally, we saw an acceleration in digital adoption and expect that trend to continue as banks and customers adjust to new ways of working.
Looking at the Corridor economy, we continue to see companies make necessary adjustments to the COVID-19 environment, which we believe will help them flourish in 2021. Many local consumers and businesses are also still recovering from the Aug. 10 derecho, and the banking industry must continue highlighting resources available to them to help with their continuing recovery.
Adaptation continues as consumer needs change
Cedar Rapids Plant Manager
There is no doubt that the pandemic has profoundly impacted General Mills’ business. Our company’s official purpose is to make food the world loves; today’s circumstances require General Mills to make food the world loves and needs. So while we’re feeling the strain of high demand, I’m also feeling a lot of pride in our mission and momentum.
Since the start of the pandemic, we’ve prioritized the health and safety of our employees so we could meet the needs of our consumers and communities. In Cedar Rapids, we have hired over 150 employees in 2020 and are in the construction phase of significant capital investment to support the growing demand in our two largest business units.
Our supply chain has stepped up in an incredible way for our retail partners and our consumers. We’ll stay sharp in the near term to meet elevated demand while continuing to invest in our long-term strategies of building brands, strengthening our innovation and enhancing our capabilities.
We are seeing a few key trends in the Corridor and across the U.S. right now. First, in a time of social distancing, demand for grocery e-commerce is growing, which we expect to continue. Second, we expect the need for value to increase as significant parts of our economy are challenged financially and consumers are feeling it. And third, people are returning to eating meals at home. Work and life plans have been put on hold for many Americans, and consumers are turning to brands they know and trust to bring a sense of normalcy and comfort to their lives. We provide those trusted brands.
Using renewables to serve customers and build stronger communities
Alliant Energy – Iowa
In 2021, Alliant Energy’s Clean Energy Blueprint will accelerate our transition to more renewable energy, which benefits the environment and helps customers avoid hundreds of millions of dollars in long-term investments.
It will start with our teams forming the partnerships and finalizing the locations to build 400 megawatts of new solar generation in Iowa. Once the solar farms are in service and added to our existing wind and solar resources, we project that nearly half of our generation portfolio in Iowa will come from renewables by the end of 2023.
As solar technology becomes more affordable, so does energy storage. We look to combine solar farms and batteries to enhance reliability and resiliency so we can deliver solar power that’s generated during the day whenever it’s needed. There are also new offerings to help customers, businesses and communities achieve their own renewable goals through a host of community solar programs that help offset their energy use.
Our focus will be on serving our customers and building stronger communities as our Clean Energy Blueprint takes shape across our service area. To do that, we’ll continue to build on our diverse energy mix that provides the safe, reliable and affordable energy our customers count on.
Look for signs of life in the first half
Owner, Graceann BoutiqueCustomer & Community Relations, Deery Brothers Motors
We are really looking forward to 2021. Being part of two retail sectors [clothing and autos] is an interesting balance, and they actually share a lot of similar market trends. Both sectors made a lot of changes in 2020 like so many businesses, pivoting to customize the buying experience for the customer.
For 2021, we will definitely be looking for an upswing in production in both industries, as factories are putting more emphasis on safe working conditions and making the changes necessary to allow production to go back to full capacity. We are forecasting for more availability of product and purchasing accordingly.
We also feel that although the first quarter traditionally tends to be slower, autos – coming off a strong fourth quarter – will remain strong. Retail will play catch up, and likely come around in the second quarter. E-commerce will remain strong, but I believe we will see more storefront traffic in the second quarter.
We are really keeping an eye on customers’ wants and needs now more than ever, with an emphasis on how they want the buying experience to happen. Our biggest challenge will be the same as in 2020 – being able to make those quick changes, and remaining flexible in our ways of doing business.
Wealth transfer, volatility will keep sector busy
Kalvin Grabau Keele
We are optimistic about 2021. Not because we want 2020 to be over, but because of our ability to work virtually and in person, the proven resilience from this year, the memories we will make, and the growth that I believe our firm and industry will experience.
The demand for financial planning will skyrocket in the coming years and decades, in no small part thanks to the massive baby boomer wealth transfer and the continued realization that DIY planning isn’t sufficient for the majority, especially in volatile times. The chance to work with people individually, to customize a plan for their future, and give them peace of mind will become the paramount position.
The headwinds or challenges I see in our industry will be the continuous discussion of tax law changes and the ability to be digitally savvy in a rapidly moving, technology-forward business.
We will continue to monitor people’s interest in working collaboratively and interdependently with trusted advisors while integrating a digital experience that allows clients a personalized relationship with our firm and their advisor.
Growth in the wings at CID
The Eastern Iowa Airport
I am cautiously optimistic as we enter 2021. Vaccines are on the way and improvements in COVID testing are beginning to open borders. We will not be out of the woods in 2021, but we will be stronger.
One of my industry mentors use to say, “A good crisis/challenge is the mother of invention.” Network carriers suggest they will be smaller coming out of the global pandemic. These are the carriers providing the bulk of the service to small communities. Industry wide, air service to small communities will continue to be challenged, and states, communities and regions will need to think differently. New service and growth opportunities are out there, with ultra-low cost carriers (ULCC) likely to lead the way in new route announcements. Eastern Iowa is well positioned to capture potential new opportunities, but we always remind ourselves it is a marathon, not a sprint.
A bright spot for CID will be the continued growth of cargo traffic. We ended 2020 with a 6% increase in cargo traffic. CID has been handling just under 50% of Iowa’s cargo, and we believe that percentage will continue to grow. The new UPS facility on the west side of the airport will be completed this spring and UPS will open it later this year. The building will be eight times larger than its previous location at the airport, so they will be prepared for additional growth.