- September 2013
- Posted By Debbie Ellard
- 2 Comments
GREETINGS TO ALL AND WELCOME TO THE SYMPOSIUM SLIDE DISCUSSION
Current Projections To Consider
What Are You Doing For The Next 60 Months?
The above slides provide information from U.S Economic surveys and forecasts. The current projections are an important piece of the puzzle when deciding your business plan for your practice.
Slide #1 Illustrates the US Unemployment Rate.
From 2008 through 2009 the US economy lost over 9 million jobs. What does that mean to us? It means several things, a couple of which are intuitive. One of the things which may not be obvious is what this does to gross domestic product (GDP).
n. Abbr. GDP The total market value of all the goods and services produced within the borders of a nation during a specified period.
Empirical studies on the relationship between GDP and unemployment show that for every percentage point fall in the unemployment rate there is an increase in GDP by 2.5 percent. Experts believe that the reason for this large coefficient is because the unemployment rate does not consider discouraged workers who obtain a job before they are counted in the unemployment numbers. Another reason is when economic output increases, firms typically don’t hire new workers but have their current workers work longer hours. Also, some industries have increasing returns to scale where increasing the labor force has a multiplicative effect on their output.
This means for every job lost it in turn causes the loss of connected jobs and the consumption driven US economy and the sale of products to other nations lose steam.
You can see the recovery in the graph but it is very slow and small. Why?
SLIDE #2 Illustrates the Employment to Population Ratio
This slide tells the “real” story in my opinion. It is intuitive at this point that the ratio went way down during the economic collapse. Before you look at the so called “recovery”, first look back to 2002. We had two big drops prior to 2008. Now fives years later, we have experienced the longest and slowest recovery in world history.
So why did I use these two slides?
- Before you can chart where to go you should know where you are, economically speaking.
- The recovery rate suggests a long, slow, drawn out, but steady improvement through 2018. Much of this is still very fragile to government policy, which alone is cause for concern. Most of the different stimulus projects, several of which most people are unaware of and would be lengthy fruitless discussions here, have not worked. This is contrary to almost ever other example in history!
The One Thing to take away here is this: You need to strategically plan your method of mitigating these conditions going forward in a sustainable manner.
In a future post we will look at two graphs from the IBIS World Report. This information can be purchased on line. The information can be filtered for forecasts for dentistry or a broader scope. These documents are priced between $1000- $2500.
After this we will dive into the heart of my Kois Symposium presentation.