Port holds key to Jacksonville recovery

Thursday, February 11, 2010
Jacksonville Business Journal
by Rachel Witkowski Staff reporter

The rebuilding of the economy will come through corporations and exports, as emerging countries such as China and Brazil will bail out developed countries including the U.S. and Jacksonville’s Port has a chance to be a part of that global economic rebuilding, said an economist for Fifth Third.
“The biggest area of your economy is in trade and transportation,” said John Augustine, chief investment strategist at Fifth Third Bank who spoke before the Association for Corporate Growth in Jacksonville Thursday. About 70 percent of the Port of Jacksonville’s business in export, he said. “That’s very rare.”
Export business will be particularly important for the global rebuilding because this recession will be the first one since World War II when the emerging countries — China, Brazil, India and Russia — are going to bail out developed countries including the U.S., Japan, and Europe, which have incurred more debt coming out the recession. “So global issues should be on the forefront of your minds,” he said.
On the other side, Augustine said the corporate profitability will be a re-builder to the economy. There were nine consecutive quarters of profit losses in the S&P 500 corporate sector, the longest it has been consecutively negative in a recession, he said. The projections are that profitability will grow 25 percent in 2010.
“That’s a huge spike in corporate profitability coming out of this,” largely because companies are being so lean, Augustine said.
He also predicted that the global capital markets will begin to grow in the single digits this year, unlike the double digits in 2009 that drove 401Ks up.
Augustine’s speech was primarily focused on the shifts in government policy this year, either in reality or perception, and the market reactions to them. “And that’s going to create volatility,” he said.