Economists, Business Leaders Discuss Trends at Inaugural Kentucky Economic Summit

Business leaders, economists, and policy experts gathered in Lexington on May 21 for the inaugural Kentucky Chamber Economic Summit, presented by the Cincinnati/Northern Kentucky International Airport (CVG), which outlined how workforce challenges, inflation, and policy decisions are shaping Kentucky’s future.

Opening the summit, the Chamber Vice President of Policy Dr. Charles Aull said Kentucky businesses are navigating constant change driven by shifting policy, emerging technology, and economic uncertainty.

Larry Krauter, CEO of CVG, highlighted the airport’s role as a major economic driver for the region and how that contributes to Kentucky’s competitiveness and future growth. He also stressed the importance of bringing business leaders together to better understand the current economic conditions and how it impacts them.

Leading a Business in the Commonwealth: A CEO Perspective

Kentucky Chamber Chair-elect Kim Halbauer of Fifth Third Bank and board members Hollie Harris of Appalachian Regional Healthcare and Jonathan Westbrook of East & Westbrook Construction joined the Chamber’s Kate Shanks for a discussion on Kentucky’s business climate, workforce needs, and long-term competitiveness.

Panelists said Kentucky’s location, affordability, and logistics network continue to support business growth. Halbauer noted that about 750,000 students live within a 200-mile radius of Frankfort, giving Kentucky strong workforce potential.

Much of the discussion focused on workforce development and artificial intelligence. Westbrook said interest in skilled trades careers is growing again and encouraged businesses to embrace new technology. Harris said AI is already improving efficiency across the health care industry. Halbauer added that AI will soon become a standard business tool.

Panelists also discussed ongoing challenges, including physician shortages and workforce recruitment. Despite those concerns, the group expressed optimism about Kentucky’s future if the Commonwealth continues investing in workforce development, innovation, and collaboration.

Keynote: A Federal Reserve Perspective on the State and National Economies

Kentucky Chamber Board Member Seema Sheth of the Federal Reserve Bank of St. Louis’ Louisville Branch and Julianne Dunn of the Federal Reserve Bank of Cleveland discussed the Federal Reserve’s role in monetary policy and financial oversight.

Sheth explained how the Federal Reserve gathers feedback from communities and business leaders across the country to help guide monetary policy and interest rate decisions. She also discussed the Federal Reserve’s role in maintaining financial stability, overseeing banks, and supporting the nation’s payment systems.

Dunn discussed how interest rates affect borrowing, business investment, hiring, consumer spending, and inflation. She noted inflation has eased from pandemic-era highs but remains above the Federal Reserve’s 2% target. Businesses and consumers, she said, continue to face higher energy prices, housing costs, tariffs, and economic uncertainty.

Kentucky Economists Roundtable

Dr. Aull joined economists Dr. Mike Clark and Dr. Alison Davis of the University of Kentucky and Dr. Jose Fernandez of the University of Louisville for a discussion on Kentucky’s economic conditions and outlook.  

The panelists described the current environment as “low hire, low fire.” Employers are hesitant to reduce payrolls, but many are also slowing hiring because of continued uncertainty. Panelists also pointed to Kentucky’s aging population and growing demand for health care workers as long-term concerns.

The group discussed regional differences across Kentucky’s economy and concerns about fuel costs, tariffs, inflation, and supply chain pressures, particularly in rural communities. Artificial intelligence was another major topic. Economists described AI as a productivity shift that could reshape industries and workforce needs over time.

Keynote: Economic Outlook from the U.S. Chamber

Curtis Dubay, chief economist for the U.S. Chamber of Commerce, shared a national economic outlook focused on inflation, tariffs, workforce shortages, and global instability.

Dubay said the U.S. economy continues to grow at roughly 2%, driven largely by strong consumer spending and productivity gains. He also said affordability remains a major challenge for consumers. Housing, grocery, transportation, and energy costs continue to rise faster than overall inflation.

Dubay highlighted policy uncertainty surrounding tariffs and trade, which is making businesses more cautious about investment and expansion.

He also discussed long-term workforce trends, including an aging population and slower labor force growth. Dubay said labor shortages will continue to pressure the economy in the coming years. At the same time, he pointed to artificial intelligence and productivity growth as opportunities for stronger long-term growth.

Regional Economic Development: Insights from the Front Lines

Economic development leaders Sharon Butts of the South Western Kentucky Economic Development Council, Colby Kirk of One East Kentucky, Trevor Pawl of One Louisville Inc., and Terri Bradshaw of the Kentucky Association for Economic Development discussed how regions across the Commonwealth are balancing business growth with workforce, housing, and infrastructure challenges.

Much of the discussion focused on workforce demands tied to manufacturing, logistics, energy, and technology, with leaders emphasizing the importance of faster training programs and better alignment between employers and education systems as industries continue adapting to artificial intelligence and automation.

Speakers also said economic development increasingly depends on quality-of-life factors beyond incentives, including housing, downtown development, recreation, and health care access. Kentucky’s long-term growth, they said, will depend on regional collaboration, site readiness, and investment in competitive communities.

Entrepreneurship’s Impact on Kentucky’s Economy

Entrepreneurship leaders discussed how startups and regional innovation efforts are driving job growth, investment, and long-term economic competitiveness across Kentucky during a panel featuring Monica Bilak of Sprocket Inc., Larry Horn of Amplify Startups, Dave Knox of Blue North, and Lisa Bajorinas of the Kentucky Innovation Hubs.

Kentucky Innovation Hubs is a Kentucky Cabinet for Economic Development program that connects entrepreneurs with universities, businesses, and accelerators across the state’s 120 counties. Bajorinas noted the Innovation Hubs network has supported more than 3,100 startups since July 2025 and helped companies secure nearly $136 million in investment capital.

Panelists said Kentucky’s startup ecosystem is helping launch new businesses, attract investment, and create high-paying jobs in both urban and rural communities. The discussion also focused on business succession planning, as many Kentucky business owners approach retirement without clear transition plans.

Speakers described Kentucky’s collaborative startup environment as a competitive advantage. They said strong connections between entrepreneurs, investors, universities, local governments, and business leaders help startups grow faster and create stronger long-term opportunities across the Commonwealth.

Designing a Growth-Driven Tax Code

Tax policy leaders discussed how Kentucky can remain competitive as more states pursue tax reforms aimed at attracting businesses and investment.

The panel featured Senate Appropriations and Revenue Committee Chair Chris McDaniel, Katherine Loughead of the Tax Foundation, and Mark Sommer of FBT Gibbons—moderated by Brian Cromer of Stites & Harbison.

The group walked through Kentucky’s tax reforms since 2018, including the transition to a flat individual income tax and the use of revenue triggers tied to future rate reductions.

McDaniel stressed the importance of maintaining stability and predictability in tax policy to ensure Kentucky maintains fiscal responsibility, an approach that has allowed the Commonwealth to reduce its individual income tax from 6 to 3.5 percent while also building healthy reserves and making targeted investments.

Loughead said that though Kentucky has improved its national tax competitiveness since implementing these changes, however other states are working toward the same goals and making similar reforms.

The discussion noted additional long-term challenges including occupational taxes, corporate tax policy, and emerging industries such as data centers and digital commerce.

Sommer added that Kentucky must continue modernizing its tax structure to stay competitive with neighboring states.