Tracking Economic Trends for 2023 and Beyond

Goodbye 2022 and the tumultuous turns in the economy, housing market, and the state of our world.

We are still in a state of uncertainty as we head into the new year.  As a small business owner, it is critical that you follow the state of the economy, both national and global.   This helps you make better business decisions regarding hiring, expanding, spending, and investing.

While there is a great deal of media hype, I have been counseled to not be skewed by this.  The news focuses on what the government puts out for data on GDP and the state of unemployment but instead, why not look at the following instead:

Who is hiring?   There are many data points that track this including ADP, who releases a National Monthly Report, but if you are in the design/build industry, searching data through AIA/ASID/IIDA reports may give you a better understanding of the metrics we need to look at.  You want to be looking for cues - is employment down, are wages increasing, is hiring up?

Another great tracker is the NFIB, National Federation of Independent Businesses - Small Business Optimism Index. This targets businesses like yours and mine as they survey thousands of their members to take the pulse on what is happening in their businesses and it gives you a good idea of where the economy is headed.

While most of us live in the wholesale marketplace, having a look at retail sales indices is a great metric for seeing how people are purchasing.   I suggest looking at both brick and mortar and online sales.  You can google this and many different associations will publish numbers and trends but a great tip is to check out the National Retail Federation who publishes sales numbers from their members, which gives you real data every month, versus estimates.

With our supply chain woes continuing to persist, you may also want to look at freight and shipping index sites.  There is a website - TradingEconomics.com where you can find the Baltic Dry Index.  If the numbers are up, it means that there is a lot of movement across channels, and this signifies more demand for freight.

Some experts are predicting that the economy is recovering. Many design/build professionals agree.   To that point, I suggest you watch the Architecture Billings Index, which comes out each month and is published by the American Institute of Architects, the AIA.   If architects' billings are up, this means more building is taking place, allowing for more GC's and designers to project more work for the coming months. If that index is not strong, we can predict that the construction industry is in a downturn.

I also like to check out real estate trends.  When people are purchasing homes, doing commercial buildouts and the like, we know there will be a need for our services.   You can hop on to Realtor.com who publishes a weekly housing trends review, discussing price points and inventory.

Tracking is a part of running your business or supporting your boss in running their business.  I strongly suggest you set reminders in your calendar to track monthly so that you are always on point when making key hiring/spending/expansion/contraction decisions.