20100118-NEWS--1-NAT-CCI-CL_--
1/15/2010
4:53 PM
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Vol. 31, No. 3
INSIDE Kent has big plans Both the city and Kent State University plan to transform into more attractive and user-friendly places through renovation and redevelopment. Read Shannon Mortland’s story on Page 3.
$1.50/JANUARY 18 - 24, 2010
Manufacturers still skeptical Nationwide, industry conditions favorable for improvement, but struggle remains for locals By DAN SHINGLER dshingler@crain.com
For the United States, various economic indicators point to a rebounding industrial sector in which factory orders are on the rise and companies are becoming more optimistic about their futures. But here on the ground in Northeast Ohio, there is no such consensus.
“There are a lot of positives for manufacturing. I can see at a national level the industrial production indicators turning positive,” said economist Ken Mayland, president of ClearView Economics in Pepper Pike. “What I cannot say is that I’ve got an indication here in Northeast Ohio that (the rebound) is being felt. I just don’t have that anecdotal information.”
SENDING A MESSAGE Local agencies expect higher demand for their mobile marketing services as device use proliferates By KATHY AMES CARR kcarr@crain.com
Dr. Mayland is a favorite of many local manufacturers who pay for his prognostications. He relies on them for anecdotal evidence of what is happening at a micro level and below the radar of national indicators. He spoke to Crain’s just days after the U.S. Department of Commerce reported factory orders were up more than 1% in November, and the Institute for Supply Management reported a fifth straight month of improvement in the manufacturing sector’s sentiments and prospects for growth. Both reports came out in early January.
Those numbers support Dr. Mayland’s belief that the conditions are in place for manufacturing to improve, even though that’s not yet what he’s hearing from manufacturers. Many local manufacturers say they are seeing continued slow sales that leave them questioning whether the national numbers are telling a true tale of what’s happening in their sector. “Listening to the economist I subscribe to, I (should) expect an increase in business this year over last. See OUTLOOK Page 7
Private equity firms anticipate a modest recovery Tight credit still affects deal flow By ARIELLE KASS akass@crain.com
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lease excuse Jason Therrien if he’s itching for 2010 to move along. As Blackberries, iPhones and other mobile devices become more ubiquitous, local marketing and advertising shops such as Mr. Therrien’s thunder::tech expect clients to tap increasingly into their mobile marketing services. “Mobile marketing will continue on a good growth base, but will really pop for us by mid-year,” said Mr. Therrien, president of the Cleveland-based marketing firm. From smart phone apps to text messages, mobile is emerging quickly as a channel through which marketers can relay more targeted messages to a growing user base.
Marginally better still isn’t good, but it is an improvement over what private equity firms saw in 2009, a year when deal flow was tight and financing was sometimes impossible to line up. In 2010, Northeast Ohio’s private equity firms don’t expect a quick turnaround. However, they do see signs that their businesses are moving in the right direction, allowing them opportunities to make investments or divest of their holdings. David Given, managing partner of Blue Point Capital Partners, said he already is seeing more activity than in 2009, which he described as “an abysmal year.” “I don’t think it’s substantially better,” he said. But, he added, “In general, you get the feeling things have bottomed out.” The anticipation that the bottom has been reached fuels optimism, Mr. Given said, and pushes people to believe that they will get better value for their companies — either buying or selling — than they would have when the economy was still on its way down. “Credit in our mind is still very tight, but it’s available,” said John Mueller, CEO of CapitalWorks LLC. “It’s still going to be a difficult year to get things done. Good companies without a compelling reason to make a transaction will stay off the market.” Mr. Mueller and others said tight credit means private equity firms aren’t able to borrow as much money for their deals, and instead must put more of their own equity into the mix. For Blue Point, that means some deals don’t get done because the firm can’t pencil out an acceptable return, Mr. Given said.
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HIGHER EDUCATION Post-9/11 GI Bill benefits veterans, local schools with its educational incentives ■ Page 11 PLUS: IN GOOD HEALTH ■ WINNING TEAMS ■ & MORE