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O P I N I O N
J une 2016 is the close of Q2 or Q3, depending on your flavor of fiscal year end, and many of you – owners, CEOs, CFOs, and financial managers – are looking at how the firm performed through June 2016. But it’s worth pausing at this point in the year to look predictively toward the future. Predictability and vulnerability As June 2016 comes to a close, don’t forget to crack open the budget, and do whatever it takes to either catch up or get ahead.
We have the following predictions from greater minds than ours: ❚ ❚ AIA. “While rising interest rates could pose a chal- lenge to the U.S. economy, lower energy prices, im- proved employment figures, and an enacted federal budget for 2016, are all factoring into a very favor- able outlook for the construction industry,” said AIA Chief Economist, Kermit Baker, Ph.D., AIA. “And after several years of challenging economic circum- stances the institutional project sector is finally on very solid footing.” ❚ ❚ Goldman Sachs. “Each of the key components (in the index) – long rates, the dollar, equity prices, and credit spreads – has retraced most or all of its prior deterioration,” Goldman economists Jan Hatzius and Chris Mischaikow said in a note to clients. “The implications for U.S. growth are quite positive.” ❚ ❚ IMF. “Recovery is projected to strengthen in 2017
and beyond, driven primarily by emerging markets and developing economies, as conditions in stressed economies start gradually to normalize. But uncer- tainty has increased, and risks of weaker growth scenarios are becoming more tangible. The fragile conjuncture increases the urgency of a broad-based policy response to raise growth and manage vulner- abilities.” ❚ ❚ JP Morgan. “… Companies are being pinched by poor productivity and rising labor costs on one side, and an inability to raise prices in a lackluster econ- omy on the other. The risk is that they’ll respond to the margin squeeze by cutting back on hiring and spending, leading to a recession. “With wages picking up but productivity growing in slow motion, margins are likely to continue their declines, which have historically signaled an expan- See TED MAZIEJKA, page 12
THE ZWEIG LETTER May 30, 2016, ISSUE 1154
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