The global economic recovery continues, and the 2022 midterm elections are still a year away. Still, with a contentious political landscape and predictions for record-setting ad spending, businesses are already looking to 2022 economic outlook forecasts to guide them as they plan future operating activities.
Economic outlooks provide insights that help companies make financial decisions regarding the future of their businesses, such as planning their operating activities for the coming year or deciding if they want to increase their investment in capital expenditures.
Americans are already feeling the result of increased demand, supply chain shortages, and rising inflation in the form of elevated prices on everyday goods and services such as groceries and gasoline. Combining these current economic issues with the forthcoming political issues will surely impact businesses and their decisions regarding hiring, spending, and other important planning decisions.
What is economic forecasting exactly?
Economic forecasting is the process of trying to predict or anticipate future economic conditions by using a combination of economic variables and indicators. Economic forecasts can be done at a high level of aggregation, or they may be made in great detail for a specific sector of the economy. Businesses and other entities may rely on economic forecasts as a guide for planning future decision-making such as hiring, manufacturing, and distributing.
Unprecedented Levels of Campaign Ad Spending
It’s not even 2022, and spending for the midterm elections has already begun, pacing far ahead of previous election cycles. Both Democrats and Republicans are setting fundraising records with many projecting that the level of spending on midterm election campaign ads will not only surpass every previous midterm race but could even match the level of spending seen during the last presidential election cycle.
With the U.S. Congress nearly evenly divided, and with record-breaking voter turnouts in both the 2018 and 2020 elections, the 2022 elections are also poised to be significant. The population should expect to see a very strong midterm advertising season, with nearly $9 billion expected to be spent on television, digital, and radio advertising.
Data from AdImpact indicates that total campaign spending through the first nine months of 2021 hit $774 million, which represents an increase of 61 percent over the same time period in 2019 during the 2020 presidential election cycle. That level of spending also equates to a massive 214 percent increase over the same time period in 2017, which was the last midterm election cycle.
These considerable levels of spending can directly affect businesses in a somewhat unexpected way, as advertisements may take up ad space that retailers generally use, particularly around the holidays. Potential supply and demand issues for advertising space may also potentially drive up the price of ad space.
The 2022 Economic Outlook
While the economic recovery is still currently generating an abundance of jobs, rising prices are a leading economic concern cited by a majority of adults. According to a recent Pew Research Center poll, 63 percent of adults say that they are very concerned about rising prices for food and consumer goods, with another 30 percent saying they are somewhat concerned by the rising prices.
The U.S. Bureau of Labor Statistics reported that the consumer price index, which measures the change in prices paid by consumers for goods and services, rose 5.4% in the 12 months ending in September, matching readings from June and July as the highest level in nearly 13 years. Of course, rising inflation doesn’t only impact consumers. Businesses are also seeing higher costs across the board, for everything from raw ingredients to labor.
Although this is a period of inflation that’s higher than Americans have seen in over a decade and seems to be lasting longer than first expected, U.S. Treasury Secretary Janet Yellen expects that the public can expect to see improvement by the second half of 2022 as a bottlenecked supply chain continues to recover.
Adopting a Growth Mindset
The pandemic has had an unprecedented impact across the economy, with the supply chain facing protracted disruptions and increased inflation, yet economic forecasters expect GDP growth to pick up in the final months of 2021 driven by consumer spending. Heading into 2022, economists are predicting GDP growth of around 4 percent, with continued growth in 2023.
Business leaders who learn to adopt a growth mindset believe that people have the ability to develop their talents and abilities, equating learning with effort, and believing that as long as they keep trying they will improve. These leaders value potential and they look for employees who want to grow and collaborate. For a business, the ability to adopt a growth mindset can help leaders see opportunities, even during times of crisis. Leaders with a growth mindset work with their employees to overcome challenges, create a healthy culture of accountability and drive business growth.
Recent events may have tested your business, but at Safeguard, we know that adopting a growth mindset can help business leaders drive long-term business success. Your local advisor will learn about your unique goals and then help you with personalized solutions that fit your business, so you can be even more successful moving forward. Call 855.778.3124 to get started.
Key Takeaways
- The 2022 economic outlook provides insights that help companies make financial decisions regarding the future of their businesses.
- The midterm elections are expected to impact businesses in a variety of ways.
- A growth mindset can help business leaders see opportunities, even during times of crisis.
- Your local advisor will help you with personalized solutions that fit your business so you can be even more successful moving forward.