As a small business owner, you will want to stay on top of the trends and events that shape the economy and the market. Here are some of the top issues that may affect your business in 2024, and how to prepare for them. This information was presented by Henry Sobanet, opens a new window, the Senior Vice Chancellor for Administration and Government Relations and Chief Financial Officer for Colorado State University, at the 2024 Economic Forecast Breakfast, opens a new window on January 26, 2024.
Federal Reserve and Interest Rates
After the Federal Reserve increased interest rates last year, economists were concerned this might result in a recession as that has been the trend in the past but it appears that we may have avoided that pitfall. Going forward, the Federal Reserve will likely keep interest rates stable for the next few years, which should support your access to credit and your cash flow. But be ready for higher rates in the future, which could increase your borrowing costs and your debt service. To keep on top of this consider:
- Monitoring the economic indicators and the Fed's statements
- Reviewing your debt structure and your financing options.
If you have questions about the Federal Reserve and how it works, here are a few resources that may be useful:
Housing Affordability
Housing costs have increased faster than income for many households and homeownership has declined, while renting has increased. This may lower and delay the demand for your products and services, but also create new opportunities and niches. To take advantage of these opportunities, you may want to:
- Understand the preferences of your customers, especially the younger and the lower-income segments.
- Evaluate and optimize your costs and resources, especially the ones related to your location, your workforce, your inventory and your utilities.
- Explore new technologies, platforms and partnerships for your business innovation and differentiation.
- Communicate with your stakeholders, especially the local authorities, the community groups, the industry associations and policymakers, to advocate and support the solutions and initiatives that can improve the housing affordability and the quality of life in your area.
Presidential Election
As always, a presidential election raises the possibility of a new administration with new goals, priorities and beliefs. If you want to keep informed about the candidates and their platforms, Arapahoe Libraries offers newspapers and magazines both online and in our libraries. Here are a few resources that will allow you to stay up to date:
- Denver Post - Available to read in any Arapahoe Library and online with a library card
- Flipster Digital Magazines - Access and read magazines on your computer, tablet or phone. Titles available include Time, The New Yorker and Atlantic Monthly.
Consumer Sentiment
Consumer sentiment is a statistical measurement of the health of the economy based on consumers’ opinions. The measurement takes into account people's feelings toward their current financial health, the health of the economy in the short-term and the prospects for longer-term economic growth.
During the pandemic, consumer sentiment experienced a dramatic decline and began recovering in late 2022. When consumer sentiment is high, people are more optimistic about the economy, which can lead to increased spending on goods and services.
Geopolitical Risks
Geopolitical risks are those issues that arise from the conflicts and tensions between countries and regions and how they affect the stability and security of the world. The United States is facing a complex geopolitical risk environment, due to the emergence and assertiveness of new and old rivals, such as China, Russia, Iran and North Korea. These risks may create disruption, conflict, and uncertainty for your business, but also opportunities for cooperation, innovation and growth. Be alert and informed of the geopolitical developments and trends and how they may affect your business environment and your market opportunities.
Additional Resources
By being aware and proactive, you can position your business for success in 2024 and beyond. If you’re seeking more information about the economy and market, here are 3 great resources:
- Colorado Future Center, opens a new window is a non-profit that puts out reports and articles, including a 6-month statewide economic forecast called ColoradoCAST.
- Economic & Budget Reports from the Colorado Legislative Council Staff, opens a new window is a team of economists in Colorado's state capital who publish forecasts of the Colorado and U.S. economies and state revenue each March, June, September and December.
- Business Services at Arapahoe Library – As the Business Librarian, I regularly assist business owners with getting reputable information about industry performance, including how it is forecasted to grow or shrink in the coming years. You can schedule a free appointment, browse additional business blogs, view a multitude of online resources and more.
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