I wish I could see into the future, but unfortunately I can’t. As I read the headlines and speak with clients and peers, it’s very clear that because of all the uncertainty, businesses and business owners are sitting on the sidelines waiting for some clarity. Granted the third and fourth quarter of 2011 have seen some positive activity, and some companies are hitting it out of the park, but as I reflect on what I read and hear, I’m concerned about the following:
- Lending standards could tighten due to Europe’s fiscal crises
- Economists put odds of double-dip recession at 40%
- More CFOs are concerned about strategy and growth
- Small business hiring fell in 2011
- Manufacturers plan to scale back production and payrolls
- Economy is still vulnerable to financial crises
- Fed predicts many years of high unemployment and feeble growth
- Fed is expected to disappoint those seeking a quick fix
- Economy and regulations expected to slow merger and acquisition activity
- Investor confidence in U.S. capital markets continues to slide
- Student loans could be the next bubble to pop
- Depressed housing market continues to retard the recovery
I am not trying to be a pessimist, but a realist. Most economists are predicting moderate growth. Unemployment may gradually decline, but still be far above normal for more time than we would like. Our growth rate will continue to be slow, and no one knows how the European recession will affect us. Don’t look to Washington for any magic bullet regarding economic policy that just doesn’t exist. The best advice is to be vigilant.
