Jackie is the Vice President of Economics at ITR Economics, and oversees forecasting and applied research.
Now that you’ve seen 2019 perform as we forecasted, the question is, are you ready for what’s coming in 2020?
Since the third quarter of 2018 we’ve been warning people that the US economy, as measured by US Industrial Production, would peak in August 2019 and subsequently contract. US Industrial Production peaked in August 2019 and looks like it will finish 2019 as we projected - resulting in a 99.7% accuracy rating to our 15-month-old forecast.
We measure our accuracy on all our forecasts and openly share it with you. We know you are making decisions based on ITR’s forecasts and you need to have confidence in those forecasts. With that in mind, below are 2019 forecast accuracy results for some commonly cited forecasts.
However, our forecast accuracy is only worthwhile if you’re able to capitalize on the information. In 2020, US Industrial Production will contract through the first half of the year. Plan for the second half of next year to be stronger.
During a downturn, cutting expenses and capacity is a common practice. However, this recession is projected to be relatively mild for most industries; with the second half of next year projected to be stronger, you need to ensure you don’t cut back so much that you are unable to capitalize on the upswing. Interest rates will be low; it is a good time to utilize your line of credit or finance a capex project as you prepare for next year. If your capacity was a constraint during the first half of 2019, look for opportunistic purchases now. Or, use this slower time to evaluate your internal processes and look for efficiency gains that will enable you to produce more next year without increasing your personnel or capital equipment.
There are many ways you can utilize these forecasts. If you’re unsure how you can best maximize the benefits of our forecasts, please let us know. We’re happy to help!
Director of Economics