Before reading our economic forecast which sees more storm clouds looming on a dark horizon, take a few moments to celebrate your business success.

Congratulate yourself and your team on surviving one of the worst economic and business periods in recent times.

Then when you’ve read the predictions from respected behavioural economist Roger Martin-Fagg – check out my tips on how to plan objectives and boost your business performance.

The UK Forecast

• UK inflation: Retail Price Index 3.2%,Consumer Price Index 3.5%
• UK interest rates: 0.5%
• FOOTSIE 100 at year end 5,500
• House Prices outside London: nominal (2%) real (5%)
• Commercial Property: flat
• GDP for the year 0.3%, Q1 and Q2 slight contraction, Q3,Q4 some slight growth
• Sectors: Manufacturing will grow more slowly than the last two years:
• European demand will be patchy with some shocks. Asian and US demand stronger  
• Non-food retail will continue to be very difficult with more failures
• Financial services flat – Government sector cuts will begin to bite
• Construction: 1% real growth
• Unemployment: 2.8 million at year end
• Private sector wage growth 2%, public sector 0%

The World Forecast

• Global growth will be 2.5%, the USA 2%, Brazil 2%, India 7.5%, China 7% Europe (1.5%) Russia 3%
• Oil : the Saudis need $100 per barrel to break-even on the increased bribes to their population. They will cut output to maintain this price in 2012 and 2013.
• Prices will fall in non-food commodities  
• Food commodities will be harvest dependent, but steady upwards price pressure

from Asian demand.

• These forecasts assume Europe stumbles on. If the Greek default (likely to happen

April 2012) creates a Lehman like effect, we’ll see a repeat of 2008-2010.

Take the following action to ensure your business horizons are brighter:    

1. Put your business under a microscope and review what has worked well for you and what has not. Then decide what you are going to do more of this year
2. Look after your people, reward and invest in the winners and don’t hang on to the under performers in the belief they will improve
3. Stay close to your customers and suppliers – listen and act on what they are telling you.
4. Listen to your gut because it’s this gut feeling which has enabled you to succeed to date. Trust it now more than ever because the analysts and commentators aren’t as close to the ground as you.
5. Sharpen your processes so they are always effective. Implementing early warning systems that kick in before your existing KPIs prevents your system slowing down and minimises the risk of lost opportunities and profits.
6. Most importantly – don’t lose heart. Many of the stories and media reports are beyond your control. Instead focus on what you can do and control, do it well and tell everyone about what you are doing – and why.

 

Share with us your strategies on keeping a sunny disposition and being upbeat through the prolonged gloom.