In my CEO peer advisory groups this month I had them talk with one another about trends. Specifically I was interested in trends in their industry that may either be to their advantage or may be harmful. I posed three questions:
1) What needs to change for your company to take advantage of the next three years of growth?
2) What are the trends in your industry that will help you?
3) What are the trends in your industry that will hurt you?
My curiosity had to do with the economic predictions of Alan and Brian Beaulieu, economists and founders of ITR Economics (itreconomics.com).
In a January webinar to Vistage members they shared their views of what is ahead for 2015 and beyond. Their opening statement set the tone—for 2015 it is a good time to be doing business in the U.S.
Here are some highlights from their webinar:
- Continued moderate rate of growth from 2015 through 2017
- Now is the time to invest in people, processes and equipment
- Be North American-centric rather than Europe or Asia
- Oil prices will be down until the 3rd quarter, impacting the energy industry but putting more money in consumer’s pockets.
- Mexico’s lower cost to manufacture will draw more manufacturers away from China and cause growth in our southern neighbor’s economy
- Interest rates are low so borrow all you can now to finance your growth-they will start to rise next year
- Employees are more willing to quit a job they don’t like because they now have the confidence they can find a new job quickly-what are you doing to retain your top talent?
- Hiring issues include: rising labor costs and attracting and keeping quality workers
- As labor and material costs rise there will be an affordability issue in the residential housing market but high-end home sales will continue to move well and help keep the rate of new home construction growing moderately
- Commercial construction will grow as well but builders should be aware of rising labor and material costs and avoid projects for health care facilities; private medical buildings; private education; and airport passenger terminals
- Prepare for the next recession beginning 2018-2019
- Begin building wealth now in preparation for the next significant depression in 2030
In conclusion, I would recommend that you schedule a half-day or all-day off-site meeting with your leadership team. Talk about the positive and negative industry trends that could possibly affect your company over the next 3-5 years. You only have three years to benefit from the current uptick in the economy and you want to avoid any negative trends that will prevent you from taking advantage of it.