Each year I prepare a budget for Marketing Innovations. Like many CFOs, I look for guidance on trends and forecasts to predict the economy’s direction. The sources vary, but most are industry specific such as earnings announcements and articles in industry periodicals.
Sometimes, I will look to government sources for a macroeconomic perspective. This year in particular, I am seeking help to decipher the economic tea leaves to determine the economy’s influence on Marketing Innovations’ future revenues.
I was reading the beginning of the CBO’s (Congressional Budget Office’s) Economic Forecasting Record: 2009 Update and was startled by the following statement: “CBO’s forecasting record provides a measure of the uncertainty underlying forecasts under normal circumstances. However, the current degree of economic dislocation exceeds that of any previous period in the past half-century, so the uncertainty inherent in current forecasts exceeds the historical average.”
The CBO report is the Blue Chip consensus for the United States’ economy. I sensed economic uncertainty, but the CBO has confirmed it. Am I better off knowing the best and brightest economists don’t know with any reliable certainty the direction of the economy? Yes, it assures me I was not misreading the numbers and confirms my belief in taking effective measures to conserve cash and move inventory.
Will the economy improve? Sure it will. The question on everyone’s mind is when. Too soon to say for sure, but the key today is to hold on until it does.