3 Charlotte-area CEOs share economic predictions, tout the city’s important assets

The focus for business in Charlotte in 2024 and beyond is about its people, city business leaders and executives said, amid inflation and rising interest rates.

Three CEOs from the region’s largest companies — Marvin Ellison of Lowe’s and Brian Moynihan of Bank of America, along with Ric Elias of Red Ventures as moderator — talked about the economic forecast in Charlotte for next year and beyond during the Charlotte Regional Business Alliance’s annual economic outlook event Tuesday.

Before introducing them, Charlotte Regional Business Alliance CEO Janet LaBar said the economic development nonprofit is putting a focus on people next year — attracting and training people, partnerships for inclusive growth and civic engagement. “Small businesses, all businesses, are better here,” she said.

Creating and attracting workers to Charlotte was echoed throughout the question-and-answer conversation between Ellison, Moynihan and Elias.

Here’s what they said. Questions and answers have been edited for brevity.

Following Tuesday’s inflation report release of 3.1%, where is the consumer today and how does that play in your thinking for next year?

Moynihan said Bank of America’s 37 million account customers and 66 million consumers have slowed their spending. Comparing 2022 to 2021, the amount of money that went out of their accounts grew by about 9.5% year over year. In 2023, that slowed to about 4%.

“So, what that’s telling is the consumer has adjusted because of inflation, because wage growth has slowed down, whatever reason they have adjusted their behavior,” he said. “But people have the capacity to borrow. So consumers are in pretty good shape, frankly.”

With continued low unemployment rates across the country, he said “it’s hard to have a recession if everybody’s working and making money.”

Ellison said Lowe’s core customers have an average of $340,000 in home equity with mortgages that have interest rates as low as 3.5% fixed.

“So that customer still feels good about their current housing situation even in an environment of sustained interest rates and inflation,” he said.

At Lowe’s, 75% of the business is non-discretionary — meaning items such as a broken refrigerator or a water heater need to be replaced. “That is the essence of home improvement,” Ellison said.

During the pandemic, spending went up on non-discretionary items like grills and outdoor spaces. Moynihan said this summer was the summer of spending on experiences — like concert tickets and vacations — instead.

“But as you come to the fall, that’s all leveling off across all categories, which is a healthier place to be,” he said.

Do you expect Federal Reserve rates to stay as stable as they are?

“Our team has the economy slowing down then staying in a positive growth mode for the first through third quarters next year, then starts picking back up,” Moynihan said. He said they expect the Fed to lower interest rates three times next year, and four times in 2025.

Long-term mortgage interest rate averages are about 6% or 7%, not 3% of years past, he said. “So there’s a mental adjustment that has to go on,” he said.

Ellison said because people are staying in their homes and more millennials are buying homes, it’s creating a unique environment where homes are in demand and people don’t want to move.

The high-interest rate incentivizes people to stay put, Ellison said. “You’d rather make a home improvement investment,” he said.

Is the “Great Resignation” over?

Both Moynihan and Ellison said attrition is dropping to some of both companies’ lowest levels.

Bank of America has raised hourly wage and added benefits.

Ellison said Lowe’s brought corporate employees who worked from home during the pandemic back to the office four days a week to “balance the cultural environment” with store workers who were deemed essential.

Elias said Red Ventures is having a hard time finding the right balance with employees working from home and asking them to return to the office.

“There’s still a lot of work to figure out the right dynamic,” Moynihan said. “All businesses are going through this.”

How do you invest in economic mobility and “leveling the playing field?”

“I think we lean too hard on local, state, federal government to solve issues that I think companies can contribute not only in philanthropy but intellect and volunteerism,” Ellison said.

Ellison, himself, started as a part-time worker at Lowe’s. “It gives you a unique vantage point,” he said, “in trying to not only growing a job but career.

“We’re committed to being a part of the solution in the community.”

He said three things must work concurrently: customers need to feel respected, employees need to have a great place to work and the company needs to help make the community better.

Bank of America is similar, Moynihan said.

“We want people to have a career mindset,” he said.

What do you think gives the Charlotte region an advantage over other regions like competitors Dallas, Austin and Nashville?

Ellison quickly pointed out partnerships and community relationships, including its sponsorship with Hornets Sports & Entertainment and partnerships with Queens University and Johnson C. Smith. “All of these things will make this a great community, but it starts with a relationship,” Ellison said.

Moynihan said private- and public-sector partnerships and cooperation is key. “It does not exist in many places where the business community is a welcome discussion partner with institutions,” he said.

“Charlotte’s a place that actually lets you go to work,” Moynihan said.

What should Charlotte invest in over the next decade?

Both CEOs said keys are talent development by investing in education, infrastructure such as housing, and retaining companies to provide opportunities.

Moynihan said Wake Forest University School of Medicine opening next year and Lowe’s decision to open its tech hub center in South End are examples of education and ways to retain and attract talent to Charlotte.

Being a champion of underserved communities and providing opportunities will be a determining factor for the future of Charlotte, Ellison said.