Operator: And your next question comes from the line of Gerard Cassidy from RBC.
GerardCassidy: Tim, coming back to your opening comments about your corporate and commercial customers being cautious and you yourself seeing some of the economic cross wins or cross currents being cautious. I noticed yesterday that the real GDP number that the Atlanta Fed puts out for the third quarter, is calling for a 5.4% real GDP growth in the third quarter. It’s probably too high. But the point is there are a lot of cross currents. Can you share with us when you talk to your customers, what do you think is going to take them to become more optimistic and most cautious? Is it a Fed halting and increasing short-term interest rates? Is it better inflation numbers? What do you think they’re waiting for before they really start committing to borrowing more money and growing their businesses?
TimothySpence: That’s a great question, Gerard. I think, honestly, it’s less uncertainty, right? So to your point. So you have a lot of variables underway here. You have the Fed and rates, as you mentioned, you have an immense amount of government spending right now, which is propping up economic growth in certain sectors of the economy that otherwise wouldn’t be there. You have sort of unusual times in the housing market, where we have both high rates and still stable or even in some markets, slightly growing home prices, even the home affordability is at an all-time low. And it’s just, I think, more than anything else, we need to see some of those variables get fixed, right, in terms of what happens. So if the Fed stops raising rates and then introduces a cut, I think that would be helpful.
I think that we have to see the last of the stimulus dollars come out of consumer accounts and see what the floor looks like in terms of consumer spending. And then I think we have to have a better sense for what the underlying economic activity looks like in areas where the government spending the $2.3 trillion that are coming out of the various government programs are not driving a lot of the economic activity for people to get a little bit more focused. Because again, what I hear and went out to the opportunity to get feedback from about 3 dozen clients shortly before the call here, is they’re seeing a gradual slowdown that is essentially disposable income. They’re seeing disparities on the consumer side between either the businesses or take hotels, hotel properties that either cater to retired people or to high-end consumers in high-end destinations continue to do well, whereas the mass market properties are starting to soften.
We hear them on the B2B side being much more guarded as it relates to liquidity and monitoring cash and adjusting staffing levels and just delaying the larger CapEx investments here. And I think an interesting data point, as I had the chance to spend a little bit of time with the head of economic development for one of the large states in our footprint and I was asking about the new project pipeline. So yes, pipeline is still robust. There’s a lot of discussion going on, but the time to decision from when they’re initially contacted about a potential opportunity for either a new plant or a headquarter relocation or otherwise to the award in a given state has moved from 200 days as recently as 18 months ago to over 500 days. So you can just see the grind down here of economic activity as people sit on the sidelines and wait to get a better sense for what direction we’re headed on the economy.
