The New Global Economy Sends Mixed Signals

The NewGlobal EconomyThe New Global Economy continues to send mixed and perplexing signals making it difficult for business leaders to chart clear paths. Is now the time to re-trench again or accelerate growth? The answer is a resounding “It depends.”

Here are just a few highlights from the New Global Economy that makes navigating businesses now so challenging:

  • According to Zillow 15.7 home owners in the US were underwater on their mortgages at the end of March.  90% of these home owners are making their monthly mortgage even though there is little hope on the horizon that their equity will ever become positive.
  • Sales of new homes 3.3% in April according to the Commerce Department. Also the price of both new and existing homes increased. This gives hope that the housing market may be moving upward after the collapse in 2006.
  • As Germany’s economy stumbles the euro hit two-year lows the week of May 21. Many investors are concerned that countries like Spain may join Greece on the economic crisis watch.
  • The US economy is plugging along on a less than robust two and a quarter percent.
  • Unemployment for the “Lost Generation” (job seekers under 25) remains at 16% which is more than double the national rate. For many in this group pursuing the American Dream is becoming quickly diminishing mirage. Only half of recent grads are working full-time. Furthermore the starting salary of graduates from 2009-2011 are $3000 less than they were before the recession.
  • Hewlett-Packard plans to cut 27,000 jobs or 8% of their workforce in an effort to jump-start their growth.
  • America’s midsized companies are less optimistic than they were a year ago, according to a survey by Deloitte, LLC. The reason for their outlook was tied to slower economic growth, uncertainty in an election year, financial trouble in Europe and rising health care.
  • China announced new rules that will impact the four largest foreign auditing firms. Under the guideline the firms must limit the number of foreign-certified partners in China to a max of 40%. By 2017 the cap will be 20% but all senior partners must be Chinese.

What do these facts have to do with your business? Everything and maybe nothing.  In the New Global Economy unrelated trends can both signal and camouflage trends that can impact your business. What’s important is for business leaders to keep their eyes on the horizon looking for a trend that can lift your business to new heights or crash it on the rocks of the New Global Economy.

If you’re a business owner or executive and your primary focus is managing the day-to-day activities of your business watch out you’re about to get blindsided. In the New Global Economy be sure to devote time each day to monitor trends that are or can drive your business. What trends are you monitoring for your business? How quickly can you respond should a trend emerge that can impact your business’s success?

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