It was a hard winter in the US. For weeks on end massive weather fronts would creep across the continent spreading ice storms, howling blizzards and a polar vortex that brought frigid misery to large swaths of the Mid Atlantic States. It seemed winters assault would never end but seasons do change and as today's temperature nears 70 spring has arrived after all.
Mark Zandie, Chief Economist for Moody’s used the springtime analogy in a recent note to describe the recovery of the US economy from the Great Recession. Zandie notes some emerging factors that are creating positive momentum for economic growth.
- falling rate of short term unemployment signals workers are returning to the job market
- businesses are primed for expansion with strong balance sheets, consistent profits and favorable financial and market conditions
- fiscal and regulatory uncertainty that weighed on confidence is slowly clearing up
Rising employment and greater workforce engagement is a powerful economic stimulus. More people receiving paychecks translates into the exponential growth of buying power. Retail, real estate, entertainment and hospitality industries are best positioned to benefit from the recovery. As economic health of these sectors improve, employment opportunities within these segments and ancillary industries will also expand.
SMEs must anticipate the advent of this positive business cycle. Managers can best position their enterprises for growth by assessing what emerging market factors bear the greatest weight on their business. This allows managers to determine how to align operational capabilities with capital deployment initiatives that best address conflating market factors to serve business growth.
For example as recovery in the real estate market proceeds, new opportunities open in a multitude of related industries. The construction of high density affordable housing in urban areas is a powerful demand drivers that stimulate the need for LEED certified construction firms, inspectors, engineers, architects and building supply companies. Attorneys, CPAs, community banks, credit unions and other service providers are also beneficiaries from these emerging developments.
As community development accelerates demand is stimulated for hospitality, grocers and numerous products and services designed to address the specific idiosyncrasies of a young urban buying demographic that is affluent and growing. Is your firm ready to address emerging opportunities that emerging in your marketplace?
Turning business cycles create powerful macroeconomic risk factors that challenge SMEs. Rapidly changing market dynamics surface grave threats to complacent SMEs. Acute macro risk drivers force market players to compete for capital in realigning markets. SME’s must assess new macroeconomic risk factors to seize emerging opportunities.
Get risk aware with Macroeconomic Risk and Event App (MERA) on Google Play; a Mobile Office app that runs on MS Office and Android. MERA helps SME's assess emerging risk factors to profit from the opportunities shifting markets present.
risk: Moody’s, Mark Zandi, sme lending, job creation, market dynamics, macroeconomic risk, credit risk, LEED compliant, real estate, unemployment
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