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January eNews

2013 Economic Outlook

By Mary McGoldrick, Senior Vice President, Director of Investments

The United States and global economies are showing signs of improvement as we enter 2013. Moderate earnings growth and benign inflation should support higher equity prices in both developed and emerging markets while central bankers continue to foster accommodative monetary policies. We expect real Gross Domestic Product (GDP) growth of 2.0% to 2½% in the US, 3.0% to 3½ % globally, and 6.0% in the emerging markets.

In the U.S., the last minute compromise to avert the "fiscal cliff" will result in a modest drag on growth and promote a lingering uncertainty that will contribute to market volatility in 2013. The deal signed into law by the President on January 2, 2013 essentially failed to address the larger issues of entitlement reform, a tax code overhaul, the debt ceiling, and the sequester (other than delaying implementation of spending cuts for two months. A repeat of the August 2011 debt ceiling saga, culminating in another downgrade of U.S. sovereign debt, looks increasingly probable. Meanwhile, various sectors are showing new momentum. The recovery in housing supported by accommodative Federal Reserve policy is very encouraging. Existing home sales have been rising and the inventory of unsold existing homes is at the lowest level since the financial crisis. Rising rents have provided an incentive to encourage home purchases. Building permits, home purchases and homebuilder sentiment are rising. Residential construction is expected to contribute over 0.5% to GDP growth in 2013.

Additionally, GDP should get a boost as rebuilding in the wake of Hurricane Sandy gets under way in earnest. The East Coast was not the only region struck by natural disaster in 2012. A return to more normal weather after last year’s massive Midwest drought would add close to 0.5% to growth as agriculture rebounds.

The auto industry also continues to rebound. November sales were at their highest level in nearly five years. Industry observers are optimistic given the record age of the U.S. auto fleet which has been described as a “rolling junkyard”. Better demand overseas should help boost global trade. U.S. exports already show signs of strengthening. The U.S. is en route to becoming a global energy powerhouse and that alone will result in a significant improvement in our balance of trade over the coming decade. U.S. oil and gas production is surging due to the ample yield from shale based oil and gas deposits.

Employment numbers will likely remain a focus throughout 2013. The U.S. economy added just over 150,000 jobs on average per month in 2012, a fair showing. While the unemployment rate declined a full percentage point to 7.7%, the labor participation rate also declined, somewhat exaggerating the apparent improvement in the unemployment rate. Nonetheless, this performance is more than adequate to absorb population growth and increase confidence in a self-sustaining recovery. The Federal Reserve remains dissatisfied with the pace of job creation. As such, the Fed will continue to inject massive amounts of liquidity into the economy via quantitative easing. In December, the Fed announced that in addition to ongoing monthly purchases of mortgage-backed securities, they will target for purchase an additional $40B per month in long term Treasury bonds, bringing total purchases to $85B per month.

The Fed recently modified its guidance on monetary policy. Previously, the Fed indicated short rates would remain in the 0 to 25 basis point range until 2015. Based on new guidance, rates will remain near zero until unemployment decreases to 6.5% or inflation persists at more than a half percent in excess of their target rate of 2.0%. Given the amount of slack in the labor market, and expected modest wage growth, inflation is likely to remain benign, thus we see little chance the Fed will raise short term rates in 2013.

In summary, we anticipate that with progress towards resolution of many uncertainties that concerned investors in 2012 (fiscal cliff, European debt crisis, Presidential election, etc.) , we will see less volatility in 2013. While risks are always present, including unrest in the Middle East and Asia and continued disagreement in Washington regarding fiscal policy, we believe that 2013 will be a year of moderate growth in the economy and corporate profits coupled with price stability and relatively low interest rates.

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Helping New England Businesses Thrive and Grow

The commercial real estate group at Washington Trust provides commercial real estate mortgages for the construction, refinancing, and purchase of investment real estate projects throughout New England. Financing ranges from several hundred thousand dollars to projects in the millions, including the following:

$10.5 MILLION to 100 Great Meadow Associates, LLC for refinancing and tenant improvements of a 155,645 sf office building in Wethersfield, CT.

$8.3 MILLION to Medical Asset Ventures, LLC for the construction of a 45,000 sf medical office building leased to Lifespan in East Greenwich, RI.

$8 MILLION to an affiliate of MCRS Milford Development, LLC for the financing of the 120 room Hilton Garden Inn in Milford, CT.

$5.2 MILLION to Mill Meadow Development, LLC for the refinancing of 6 buildings located in the Old Saybrook Business Park in Old Saybrook, CT.

$4.8 MILLION to Emanon Associates, L.P. for the refinancing and tenant improvements of a 75,000 sf office property in Providence, RI.

$4.6 MILLION to Taurus CD 153 Batterymarch Street L.P. to refinance a 34,521 sf office building in Boston, MA.

$1.9 MILLION to 138 Development Associates, LLC for the development of a 40-unit active adult residential community in South Kingstown, RI.

$1.6 MILLION to Fox Point Marina, LLC for the refinancing of a mixed use property which includes two restaurant units and a 56 boat slip in Providence, RI.

$1.5 MILLION to Phoenix New Park Avenue, LLC for the acquisition of a retail property occupied by Advanced Auto Parts in West Hartford, CT.

$1 MILLION to Lamberton Office Center, LLC for the refinancing of a 33,984 sf mixed use property located in Windsor, CT.

For more information about these recent financings, please contact a member of Washington Trust’s Commercial Real Estate Team:

Julia Anne M. Slom, Senior Vice President, Team Leader
Laurel L. Bowerman, Vice President
Mary K. Ettinger, Vice President
Suzanne Walsh Erno, Vice President
Catherine R. Fusco, Vice President
Bethany A. Lyons, Vice President
Timothy M. Pickering, Senior Vice President

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LinkedIn: TribalVision’s Top Ten Tips

By Damien Cabral, Vice President and Partner, TribalVision

Damein Cabral is Vice President and Partner at TribalVision, a marketing consulting firm whose mission is to help small and mid-size companies market smarter. As a marketing department for hire, TribalVision is a flexible, cost effective alternative to the traditional marketing solutions available to the business community.

Most professionals have a LinkedIn profile, but a significant percentage of those people are only using part of this useful tool or aren’t using its features effectively or efficiently. Failing to spend some time establishing, building, maintaining, and promoting a solid, engaging LinkedIn profile is a significant missed opportunity in today’s marketplace, and not just for job seekers. To that end, today, we offer our Top Ten Tips for LinkedIn Engagement.

1. Be there. As with all forms of social media, LinkedIn is an organic, changing entity that requires attention and engagement so that you can ensure that you’re keeping up with your contacts and with changes to the platform itself. Set a reoccurring appointment in whatever electronic calendar you use, reminding yourself to check in on LinkedIn at least twice a week.

2. Update your status. When you provide a status update, it appears in your contacts’ news feeds, just like it does on Facebook. This keeps your name in front of your business contacts regularly, even when you’re not having any actual interaction.

3. Share. Consider posting useful articles and information relevant to your industry, so long as you’re certain the material is reliable, well written, and worthwhile to a significant portion of your contacts.

4. Be brief. LinkedIn is not a place for wordiness and long blocks of text. Craft yourself a concise, unique “About” section, and remember that this part of your profile is about you, not your company. Keep it informative and to the point without being afraid to show a little personality.

5. Get involved. Join professional groups via LinkedIn to strengthen your connections, increase your networking effectiveness, and gather great new information.

6. Use the apps. Explore the apps in LinkedIn and add a few that demonstrate your personality and show that there’s more to you than the professional designations after your name.

7. Let people know you’re there. In your email signature, make sure you either list your LinkedIn profile or embed a link. Wisestamp is a great tool for integrating social media links neatly into your signature.

8. Make it meaningful. Rather than clicking around, sending random connection requests to anyone who seems remotely involved in your industry, build an account filled with real-world connections. Meet someone at a work function, seminar, or meeting? Instead of following up via email, follow up with a LinkedIn inmail and connection request. You’re more likely to retain the contact information in a useful way because the person’s name is associated with an account and a photo as opposed to when you enter someone’s email into your Gmail account.

9. Tweet. If you use Twitter for business, connect your accounts so your LinkedIn statuses push to Twitter.

10. Finish what you start. Last, but definitely not least, make sure your profile is complete. You wouldn’t hand an incomplete resume to a prospective employer; don’t provide professional contacts with an unfinished profile.

TribalVision operates offices in Providence RI, Cambridge MA, and Brussels Belgium. For more information about TribalVision and how they can help your business grow, please visit their website at www.tribalvision.com.

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Black & White Masquerade

Fundraiser to “Bring Back the Beach”

The Ocean House channels Truman Capote and his famous 1966 “Black & White Masquerade” event on February 23rd to benefit our neighbors in Misquamicut devastated by Hurricane Sandy. Put on your best black and/or white cocktail attire and add a little mystery with a creative mask. 100% of the proceeds will benefit “Bring Back the Beach”, a Westerly Chamber of Commerce initiative to support the Misquamicut Beach recovery efforts.

In late October, Hurricane Sandy wrecked havoc on much of the east coast. The Rhode Island coastline has felt the effects of this storm and many homeowners and business owners are still trying to rebuild and pick up the pieces left by Sandy. In the aftermath of the storm, thousands of Rhode Islanders banned together to help their neighbors in need. Volunteers spent day and night working to clean up the streets and beaches and provided a much-needed helping hand to those in affected areas. Donations of food, water, supplies and money came pouring in to local non-profit organizations, as well as the United Way and Red Cross.

Rhode Island is on the road to recovery, however there is still a lot of work to do before these businesses and homeowners are back on their feet. Join in the relief efforts on February 23rd by attending the Black & White Masquerade. 100% of the proceeds will go to support the Misquamicut Beach Recovery efforts. Tickets for the event are $125 per person and include an open bar and food stations from 7:00pm to 11:00pm. For reservations, please call 401-584-7000 or book online at www.OceanHouseEvents.com.

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