Where’s the economy going? Fast 25 execs take a guess

Keywords Fast 25 / Fast 25 2023
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This year’s Fast 25 companies can find trucks for shipping, analyze call-center data and excavate with water. They can cut your FedEx and UPS shipping costs by 25%, remove your junk and build you a home, a warehouse or an industrial building. And much more.   

What they cannot do—as their chief executives will all cheerfully tell you—is predict the future. So when IBJ asked them what they expect from the economy in the next year and how that will affect their business, they generally were cautious.

But they did offer some possible clues.

Dan Lindsey, the vice president and co-founder of Linkage Logistics Inc., the No. 1 business on this year’s Fast 25, will tell you that logistics companies are often the leading indicator of what’s happening in the larger economy. 

“So if we’re going to enter recession, we enter recession 6-8 months before everybody else does,” he said. “We saw negative economic indicators as early as June or July of last year.” The last half of last year, he said, the entire industry took a hit because demand slowed down rapidly, and it’s not quite recovered yet.

“The good news is, though, we come out 6-9 months before everybody else does. So we see the influx of product coming back into the country and going over the road before it hits store shelves. The consensus is, the back half of ’23 is going to be much more vibrant of an environment than the front half.”

Some Fast 25 execs think we’re in a recession, some say we’re headed for one, and some say we’re coming out of one. They share concerns, to varying degrees, about interest rates, the supply chain and the availability of labor. 

But all said they’re positioned to weather whatever comes next.

Eric Garrett of The Garrett Cos., which works in multifamily housing construction and property management, said he moves forward “assuming that we’ll be well-insulated as long as we are finding good pieces of real estate that match all of our typical criteria, that are great locations and that are built at a cost basis that is superior to our competitors. If we continue down that path, our projects will be insulated.”

Thomas Rector, CEO of Screenbroidery, which makes promotional products and branded gifts, said he sees “a recession looming for sure,” though he is uncertain how tough it will be and how long it will last. 

“But I’m always optimistic on things like that,” he said. “I think those challenging times are when companies get smarter and they get leaner and they innovate and find new channels of opportunities. I look at those as positive. It’s our opportunity to do better.”

Matt Smorch, president and CEO of CountryMark, shares that optimism—even though a bad economy can dramatically affect his company’s business by lowering demand for oil and gas.

“We’ve seen a lot of cycles in this business,” Smorch said. “I’m still positive on our business and the need for our products. The economy has fits and starts, but it’ll end up prospering again. In the United States, that’s what we do. We get over things, right? We’re a resilient country.”

Several companies find themselves in businesses that provide a product or service vital enough to be able to handle a downturn.

“Recession or not, down economy or not, we’re not participating,” Chad Peterman, president of Peterman Brothers, the plumbing, electrical, and heating and cooling company, said bluntly. “We know that people out there need our stuff. If something breaks inside your home, you’re going to need to get it fixed. Everybody likes to be cool in the summer, warm in the winter, flush your toilet and turn on your lights. … To me, the ability to grow and the willingness to grow is what will push any company through tough times.”

Onyx + East CEO Kelli Lawrence said there continues to be a shortage of housing of all kinds—for-sale, for-rent, of all prices—and “I think that’s only gotten to be more significant.”

“Many builders—us included—haven’t been able to build as many homes as they would like. But we still believe there is a housing need, and we’re seeing that in all aspects of our business. So that’s our shining light.”

There are other ways to fend off a downturn, executives said. One is to have a diverse client base so that if one industry falters, others will rise to provide business.

Kuldip Panchal, president of US Hydrovac Inc., which provides hydro excavation services for construction, said he expects business from the building of residential, mass industrial and big-box warehouses to slow. “But in our business model, municipal- and utility-based work, those are going nowhere. If we lose 10% of revenue from one market, we typically gain it from somewhere else.”

Another way to thrive if the economy heads south is to have a product that saves clients money. Amy Brown, CEO of Authenticx, said she doesn’t know what to expect from the economy. She expects a slowdown in new spending or a general hesitancy to spend money on new things.

“That said,” she said, “because our software is intended to create efficiencies in some ways, we think that the industry will be attracted to what we have to offer.”

Authenticx helps health care companies comb their own data to find customer insights.

Chase Flashman’s company, ShipSigma, reduces companies’ FedEx and UPS shipping costs by more than 25%. “Cost reduction is always going to be an attractive area,” he said. “So we’re going to be good whether the economy’s up or the economy’s down.”

Ultimately, no one can be truly sure of what’s on the economic horizon. So maybe the way to approach business is the way Casey Wright of Wright’s Gymnastics did when she opened her first studio in 2009 during the Great Recession.

“I was so focused on what I was doing in the gym,” she said, “that I didn’t know anything was going on. That’s how not-business-minded I was at that point. And we did great.”•

Check out more of IBJ’s ranking of Indy’s fastest-growing companies.

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