How are some people so “in the know” about the big picture of the U.S. economy and what’s happening in regional marketplaces? Roger Bowden is such a person. I noticed that he always had one or more interesting predictions to make at a monthly business development meeting comprised of CEOs and top managers across different business sectors. When Roger talked, we all listened… because he tended to be right.
Intrigued, I finally asked how he knew so much. “Uniform sales,” he answered with a big grin. “If you really want to understand the U.S. economy and predict its behavior six months from now, study what’s happening in the ordering of uniforms today. Think about it: Uniforms are used in the hospitality industry and public safety sectors, in hospitals and in retail outlets, in restaurants and automotive dealerships and by the USPS. It’s a huge common denominator across both public and private sectors. Buyers typically order weeks ahead of actual need, based on anticipated replacements and new hires; if orders fall off, customers are making what they have last longer, or they don’t expect to hire. Likewise, an upward trend predicts market optimism.”
There are, indeed, hundreds of thousands of creative indices that well-informed business professionals use to snapshot, judge or predict the strength of the U.S. marketplace, but which ones are most helpful to you and your business? Whatever sources you prefer, Roger’s “best practice” is to create a dashboard report (a simple Excel spreadsheet) listing 5-10 of your favorite monthly statistics. Then look at the trends and relationships between those numbers over the next six months. You’ll be amazed how quickly you begin to understand the logic of pairing different trending reports, and how appropriately you can apply that combined knowledge to your business plans and strategies. In other words, you could soon be among the best informed folks in any board room, alongside Roger.
Here are eight links to help you create the most useful dashboard report to help in your decision-making process!
- American stock exchanges. The NASDAQ Stock Market (National Association of Securities Dealers Automated Quotations) is the second-largest stock market comparing to official stock exchanges by market capitalization in the world, after the New York Stock Exchange –which has listed companies valued at $16.613 trillion as of May 2013. On the stock exchange, share prices tend to rise or remain stable when companies show signs of stability and growth. A recession, depression, or financial crisis is mirrored by a stock market crash, making the indexes and reported share prices a great indicator of overall market stability. [And bookmark UniFirst (NYSE: UNF), G&K Services (NASDAQ: GK), and uniform industry giant Cintas (NASDAQ: CTAS) to that dashboard report! Roger was right on: tracking uniform rental companies’ performance is a compelling way to monitor employee hiring trends in automotive, manufacturing, hospitality, and the other sectors served by the industry.]
- Overall business conditions. The National Federation of independent Business issues a monthly U.S. Small Business Optimism Index which predicts planned hiring, capital spending, inventory accumulation and sales. In August, for example, optimism dipped, which was attributed to worry about the economy’s near-term outlook (keep in mind the Affordable Care Act goes into effect soon). Also, one obstacle noted in the report was a shortage of suitable candidates for existing job openings. However, gains were made in sales expectation, and hiring plans hinted at an increase, which would positively affect the economy.
- Employment reports and trends. The ADP National Employment Report, published monthly by the ADP Research Institute in collaboration with Moody’s Analytics, provides a snapshot of U.S. nonfarm private sector employment based on actual transactional payroll data. SurePayroll Small Business Scorecard survey provides a monthly regional and U.S. info-graphic. In August, it showed an emerging trend; nearly 20% of small business reported they are more likely to hire an independent contractor than a full-time employee. The CBIZ Small Business Employment Index polls about 3,500 companies with fewer than 300 workers. All of these polls will provide different insights that, taken together, tell you even more.
- Government reports. The U.S. Department of Labor issues a monthly report of labor statistics, including the national unemployment rate, change in payroll employment, hourly wage averages, and consumer, producer and price indexes. The U.S. Department of Commerce has a Bureau of Economic Analysis site to analyze data such as the real gross domestic product, personal income, industry economic accounts, and international economic accounts, among other variables noted and considered.
These are my primary bookmarked sites, as they offer a LOT of information to help me preview overall consumer and business realities and predictions. I’ve also added a couple more to captured targeted information, like wealth management advice from Mass Mutual, for specific clients.