That recovery, however, is now in question as looming federal budget cuts and market turmoil threatens to upend what up to now has been one of the nation’s strongest regional economies.
Where does the leave Deltek? Like a lot of other companies in the region, engaged in a game of wait-and-see.
“There’s a general slowdown while many of our contracting customers wait for the federal government to move forward with its plans,” Parker said in a phone interview.
Before the recent whirlwind of financial trouble, the Washington area’s recovery was chugging along at a steady pace, compared with other markets. The regional economy outpaced the nation in key measures such as employment and housing values. Revenue at the region’s largest public companies during the first half of the year grew an average of 4.4 percent and profits jumped an average of 18.4 percent.
Starting from such a relatively healthy position has left many business leaders feeling optimistic about the region’s prospects for weathering a slowdown. They, like Parker, are mindful of the turmoil creeping into the financial system, but are not scrambling to adjust their strategies for the remainder of the year — at least not yet.
Looking back on the recession in 2008, Ron Packard, founder and chief executive of Herndon-based K12, recalls slowing the pace of investment in the online education company. This time, however, he doesn’t anticipate putting on the brakes.
Much like Deltek, K12 has been on a tear, buying six companies in the past year, and has the capacity for more acquisitions thanks to a recent $125 million investment.
“To have cash on the balance sheet and not have any debt helps insulate you a lot; it allows you to invest at the same rate regardless of where the economy is,” Packard said. “I don’t see a double-dip recession ahead, but we are going to be in a period of extended slow growth.”
Many business leaders said they have already adjusted to that new reality, well before the latest rough patch. After all, economic troubles — rising oil prices, anemic global growth and shaky consumer confidence — have plagued the market for months.
Contracting Goliaths such as Lockheed Martin have been shifting priorities for some time now. And area companies with extensive global footprints, such as Marriott International, are hedging against pockets of economic disruption by turning to stronger markets.
“You have strengths in some parts of the world, especially Asia-Pacific right now, that even if you have a slow down domestically, you won’t fall off a cliff, so to speak,” said Carl Berquist, executive vice president and chief financial officer at the Bethesda hotel giant.
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