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2017 Economic and Risk Outlook

 

What can you expect for 2017, and what are the “hot” risks to mitigate? To provide insight regarding these questions RSM US, LLP held its 2017 Economic and Risk Outlook event on January 9, 2017. The event featured content developed and presented by both RSM’s Chief Economist and National Leader for Risk Advisory Services. Highlights from this event included the following:

  • Economic Outlook
    • Domestic 2017 growth projected near 1.9%, long-term growth at 1.5%
    • Global growth to 3.2%, emerging markets face a challenging year
    • Strong labor market and rising wages, unemployment to 4.5% by end of 2017, scarcity of technically skilled, semi-skilled and public facing employees to define labor market
    • Middle market business index indicates improved growth, compensation and capital investment
    • Potential exists for massive de-regulation, multi-year infrastructure plan, tax cuts, repatriation initiative for profits held abroad, increased defense spending
    • Fed likely to raise rates 75bps in 2017
    • 10 year Treasuries to trade between 2.2% - 2.5%
    • Inflation may be restrained in near term, but moves higher along with bond yields over the long term
    • Growing political risks across EU: French, German, Dutch and potential Italian elections
    • China poses major risk in medium to long term due to debt dynamics
  • Manufacturing Considerations
    • Value chain price disruptions posed by trade rules, potentially passed along to consumers
    • Modest rebound resulting from commodity price stabilization
    • Competitiveness issues could stem from strengthening dollar, policy changes
    • Automotive spending still at robust levels, though inventory is rising
    • Aerospace – Boeing/Airbus have solid backlogs, others much shorter; low fuel prices dampening demand for more efficient models
    • Equity valuations are a concern with GDP growth remaining low
  • Risk Outlook
    • Utilization of cloud service providers
    • International operations, only India projected for strong growth in 2017
    • Cybersecurity

The question now is how will these trends impact your business? What can be done to mitigate these and other risks to your operational and financial performance? We have a robust team and network of strategic partners available to help discuss these issues, formulate strategies and assist in implementation. Let us know how we may help you achieve financial success.

Other related links (not incorporated in the above): http://rsmus.com/economics/the-real-economy.html

RSM – The Real Economy, December 2016 http://rsmus.com/economics/the-real-economy/fiscal-stimulus-takes-a-turn-in-the-spotlight.html

RSM – Here’s What a Trump Presidency Means for the Economy http://rsmus.com/economics/here-s-what-a-trump-presidency-means-for-the-economy.html

Federal Reserve Beige Book https://www.federalreserve.gov/monetarypolicy/beigebook/default.htm

 

Robert M. Eidson, Jr., CPA, CIA is a Senior Manager in our Hilton Head office and a member of the Manufacturing Services Group. You can reach him at reidson@websterrogers.com or (843) 706-8440 ext. 8457.

 
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Tim Sinclair
Tim Sinclair
Director
(843) 577-5843
tsinclair@websterrogers.com
40 Calhoun Street, Suite 320
Charleston, SC 29401
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