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Cautious Optimism For Arizona Business

While many people say Arizona’s economic recovery is going to be slower than other states, there seems to be a consensus that things will improve in this new year.

 

A change is welcomed at Hunt’s True Value Lumber in Flagstaff. They have had an up close look at the outcomes of the near halt in construction. President Curtis Crane describes his company as a partnership business. “We partner with builders, remodelers and do-it-yourselfers. And there are few

incentives out there for them to spend their money,” said Curtis.

Like many businesses, Hunt’s True Value Lumber has had to downsize and be creative during the past couple of years, just like the businesses with whom they partner.

Store Manager Rich Day says some contractors are taking jobs for which they will barely break even. “I was talking to someone the other day who bid on a job and he said, ‘I’m not making any money. All it is going to do is keep my guys busy for another week,’” Day recounted.

Crane says many of the companies he does business with have had to close their doors. “You look at your asset level and say, ‘at what point do I break even or at what point do I lose X amount and how long can I continue to lose X amount before I shut down?’ They don’t want to but there is no business, so what do you do?” he added.

But for Hunt’s True Value Lumber, it is not all gloom. “I think we have some very good neighbors who would like to see local people succeed and I think those customers always have needs,” said Crane, who has persevered through several economic downturns.

Business advocacy groups are working to facilitate economic recovery. The Arizona Small Business Association CEO, Donna Davis, tells Flagstaff Business News that there are some bright spots. “We have a very entrepreneurial culture, a very independent culture. Arizona has always been one of the top five state for entrepreneurs and small businesses,” said Davis.

Most of the fallout from the sour economy has already happened, she predicts. “We’ve got very strong players left standing and there are fewer competitors, so you have less competition, which will make the remaining companies even more viable and able to soar as things start slowly turning around,” added Davis.

As recovery moves forward, ASBA is focusing on a three-pronged approach for Arizona businesses. In addition to attracting companies for relocation to the state, Davis says it is important retain Arizona businesses.  It is also critical to support what she calls second stage entrepreneurs. “Companies like W.L. Gore in Flagstaff that are doing great, how do we help them? They usually have the most growth and innovation and hiring,” she said.

The Arizona Small Business Association represents about 5,000 member businesses throughout the state. The group wants the legislature to further improve the business climate by reducing personal property taxes and payroll taxes. The business group also wants regulations simplified. That is already happening, says Paul Senseman, a spokesman for Arizona Governor Jan Brewer. “There is a freeze on all new regulations and the regulatory process has been shrunk down substantially so we can have a much more comprehensive grasp on what our regulatory requirements and policies are as a state.” Senseman says the governor’s office wants to apply statutes properly without creating an added burden on businesses.

As the governor has worked to prepare her State of the State address and her budget (which will be presented Jan. 14), business and job creation has been a primary focus. “She has been working for many months on a new paradigm for our economic development in the state and our creation of a brand new model called the Arizona Commerce Authority,” Senseman said. Replacing the Arizona Department of Commerce, which was purely a government function, he says the public private agency promotes confidence among business leaders. “We are going to rely less on government funds that are usually scarce and unpredictable and instead focus a much greater emphasis on the professionals that know what they are doing and stand to benefit greatly,” said Senseman. The Commerce Authority will also be a great benefit to businesses new to Arizona, he added.

In reference to the economy and the role of business, Jan Brewer is optimistic. Senseman said, “The governor believes we have laid the foundation and we are going to see the benefits of that.” FBN

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