Economic Forecasts Send Conflicting Signals

Fellow marketer and blogger, Mike Bawden of Brand Central Station, read our recent post about the McKinsey survey which noted sagging economic confidence amongst global executives. In response, he noted a separate report by Constant Contact which called for a robust Christmas season for the retail sector, based on its own survey results. One says up. The other says down. So, understandably, Mike called the question: what gives? Which report should we believe?

The devil is in the details, as is so often the case. Economic reports often give the appearance of conflicting data and juxtaposed trends; it just sorta comes with the turf of economics. The world is very complex.

I wanted to share a few clarifications and insights, which I've communicated to Mike Bawden via email. Hope this helps to alleviate some confusion:

1- The McKinsey survey is global, while the Constant Contact survey is U.S. only. In the McKinsey survey, the U.S. executives were more confident and optimistic than their global peers.

2- The Constant Contact survey is an estimator of the upcoming retail holiday season; it does nothing to measure confidence beyond December 2005 ... nothing to look into 2006. Short term sales outlook, versus longer-term confidence measurement.

3- Examining the Constant Contact survey ... beyond the first question about the retail holiday sales season, roughly two thirds of the participants expressed concern about the effects of rising energy prices on their business. To me, that does connote a wavering confidence. The majority (55%) also reported "no end of year bonus" this year for employees, which is not a sign of confidence.

4 - And finally -- raw, human optimism. It is entirely possible, though illogical, that we, humans (especially business owners)think, feel & believe our own company will do well (i.e., succeed) while the rest of the world's economy is in decline. That's the determination upon which success in small business is built!

Mike, thanks for the calling out this question. An inquisitive mind is a mark of a marketing genius! And be sure to check out Mike's blog, Much Ado About Marketing. It's chocked full of great information.