The world around us is ever-changing, and our economy is too. Whether you’re a business owner strategizing to better cater to today’s customer-focused marketing trends or want to support your company’s growth, studying various economic indicators can be extremely helpful. You may be wondering what defines an economic indicator and where you can begin. Well, you’re in luck. Regardless of your industry or market focus, various economic indicators can help you succeed in your company’s future growth and planning.
What Are Economic Indicators?
Businesses both small and large, established or just starting, are encouraged to consider economic indicators when planning for new years and future growth. Economic indicators are critical statistics regarding our economy that can help you understand where our economy may be headed. While many investors utilize economic indicators to decide when buying or selling investments is most beneficial, these statistics can also help you understand the ebb and flow of your industry market and essential financial factors. There are three different categories of economic indicators that business owners study:
- Leading: signifies future changes in our economy and are utilized for short-term predictions of economic developments since leading indicators change before the economy changes.
- Lagging: data that surfaces after our economy changes and are utilized to confirm specific patterns and predict baseline economic predictions that are often not set-in-stone.
- Coincident: statistics regarding our economy’s current state in a particular area that surface simultaneously with signaled changes.
Top Economic Indicators for Sanitation Consideration
As a business owner, your top priority is to profit off today’s economy. This is how your business will evolve and grow. Many external circ*mstances impact your company’s prosperity, from politics and legislation to technology and our economy. Unfortunately, many of these impacting factors are out of our control. However, studying economic indicators can help you prepare a practical and realistic business development strategy.
The good news is, according to our research, 2021 looks pretty good!
Consumer Confidence
The Conference Board releases a Consumer Confidence Index (CCI) survey each month, so business owners can review how optimistic or pessimistic consumers are about our current economy and their individual financial situation. Taking time to assess current consumer confidence is beneficial as this economic indicator measures the overall consumer optimism about the state of our economy. No matter the specific sanitation sector your business falls into, consumer spending is the key. When consumers are confident in our economy, the chances of them spending money on your products increases substantially. However, when consumers have low confidence in our economy, spending money is much less likely. If consumer confidence is high, it’s expected that your business will see an increase in sales and overall profit.
RELATED: Developing ways to reach your target audiences better!
Economic Growth and Development
Focusing on current economic growth and development will also affect your company’s success. Every business needs to be aware of and cater to the demands of the current society – at least in some regard. Studying the growth and development of our current economy will help you determine the amount of money invested into various channels and gain a clear understanding of the existing finances of those living in society. Below are a few indicators that can help you measure the overall economic growth and development of your area:
- Human Development Index (HDI)
- Life Expectancy
- Adult Literacy
- GDP per capita
Inflation
You’ve likely heard of inflation at one point or another. Inflation refers to the price of goods and services increasing from year to year. When inflation occurs, the costs of raw materials, production, and utilities increase substantially. Businesses throughout the world are sustained by the prices of goods increasing. However, as the price of goods increases, today’s consumers’ purchasing power can be impacted. Paying attention to inflation is essential when completing future growth planning for your company, as wages need to be increased when inflation increases to adequately support the ever-changing economy.
Interest Rates
An interest rate represents the amount that a lender charges an individual or business to borrow money. In today’s economy, many companies ranging in size rely on loans from banks and other financial institutions as a primary source of financing. In most cases, financing is a crucial component of a company’s success as these expenses usually help start-ups get off the ground, open the door for equipment upgrades, and more. Paying attention to our economy’s current interest rates will help you measure a projected amount for quarterly and yearly company expenses. The higher the current interest rates, the higher the total company expenses a business owner can expect – and vice versa.
Unemployment
The U.S. Bureau of Labor Statistics releases a monthly report of the current employment situation to include statistics covering job growth, unemployment, and wage growth. Employment is another vital aspect of our economy that affects business operations in every industry as it has a direct impact on how often today’s consumers make purchases and how much is spent. When unemployment rates are low, spending increases because shoppers have more income to spend. However, when unemployment rates are high, spending decreases because more shoppers are out of work and have less expendable income. Unemployment rates directly impact a company’s success because the more today’s consumers spend, the more successful a business is, thus affecting growth opportunities.
Economic Studies Equal Business Success
Owning a business comes with numerous responsibilities, and regardless of where you’re located in the world, you want your business to succeed. While these aren’t all the economic indicators available to business owners, it’s encouraged to become familiar with each. Gaining familiarity with our current economy and what types of business platforms like eCommerce are most effective in reaching today’s consumers will help you effectively plan for your company’s future growth and development. By studying the various economic indicators, from consumer confidence and economic growth and development to inflation, interest rates, and unemployment, you’ll gain insight into your specific industry and have the knowledge to make changes accordingly to support your business entirely.
