Tune in to this Business Series Webinar as Senior Forecaster Connor Lokar uncovers capex strategies and planning insights that cut through uncertainty.
As firms head into Fall planning season, we often hear a version of “How on earth am I supposed to plan for next year when everything keeps changing?” Most of these discussions center around already determined capex plans that now seem less prudent amid elevated economic uncertainty.
This angst is not unfounded; the US Economic Policy Uncertainty Index was at one of the highest values on record earlier this year. Join Senior Forecaster and Speaker Connor Lokar as he examines these factors and moves past the uncertainties to help businesses prepare for the future. Learn what capex is prudent and what moves are best postponed or redlined altogether.
Concerns about the difficulty of planning for the future amid uncertainty are valid. However, we are well versed in forecasting and advising our clients on making capex decisions in the most uncertain of times, from the post-9/11 period to the COVID-19 pandemic and on, we have continued our work. For this business cycle specifically, despite all of the uncertainty, our forecasts have held up. Forecasts for US real GDP, industrial production, retail sales, single-family housing, and employment have forecast accuracy of 97.7–99.9%, with a duration of 10–17 months. Furthermore, our forecasts for consumer and producer prices remain highly accurate as well, with over a year of longevity for each. Through elevated economic uncertainty we can still forecast, and you can still plan with confidence.
We worry that the hesitance around this uncertainty will cause some clients to take a step back from proactive planning, which will ultimately hurt their profitability. We urge firms to focus on what they do know about the economy, their markets, and their business to make informed capex decisions. Failing to do so could be incredibly costly — we know, for example, that inflationary pressures are on the rise due to a litany of drivers both political and non-political. In other words, even if we see economic uncertainty subside, inflation will continue to go up. Rising electricity costs, a labor shortage, a housing shortage, and a desire to shorten supply chains (at increased expense) will see to that even if the trade war subsides.
Join Connor on the August Insider webinar as he reveals some certainty with respect to capex amid the uncertain economic backdrop.
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