(dailynews.com) Will the election or other economic tricks upset the treats the business climate has been producing?
As we celebrate ghosts and goblins and candy corn, the economy continues to generate “mixed signals,” as some economic patterns suggest the recovery’s oomph is running out. It’s scary to think another downturn is on the horizon.
But what might shock the business climate back to gloomy?
In honor of Halloween, here are five things that could spook local and national economies in the coming months:
1. Slow Growth
Forget the national political drama. Southern California has its own economy-changing decisions.
In more than a few cities, slow-growth initiatives and/or candidates on the ballot would delay or deny new development. Voters have a tough decision: More building, perhaps to lower local housing costs, or slow expansion and risk cooling real estate.
If slow-growth supporters do well on Election Day, it’s a good bet others will follow with the same mantra. That could definitely spook developers and crimp the ongoing local economic expansion.
2. Skittish Electorate
No matter the national election results, numerous people will be very unnerved. Recent consumer confidence polls have reflected that anxiety, including one that puts California’s skittishness at a two-year high.
Disgruntled voters likely won’t be dying to overspend, say, in the upcoming holiday season. It’s also not clear how corporate chiefs or financial markets might respond to who wins the White House or who controls what in Congress.
Any surprising results could spook shoppers, traders or CEOs – locally and nationally – and the resulting collective pullback in spending will dent what’s already been a somewhat disappointing year.
By many measures, the cost of living has risen at a modest rate since the end of the Great Recession. It’s about the only thing that’s made recent thin raises tolerable.
(Of course, many in Southern California would argue otherwise about the cost of living – especially those complaining about the region’s soaring housing costs.)
In today’s cost-conscious world, there’s little excess production capacity or idle facilities. That’s led to shortages of numerous goods.
If skeptics are wrong and growth continues, surging demand could end low inflation. If nothing else, that could spike interest rates. Then consumers and CEOS will cringe at the damage done to their respective budgets.
4. Cyber Attack
Once fodder for science fiction novels, technology terror is now a real-life nightmare.
When seemingly everything is connected online, the potential for technology-induced economic mayhem is high. Any truly serious online insecurities would create many losers.
Such an attack would make individuals and institutions rethink their internet lives and strategies.
At a minimum, shopping patterns could change. Technology use might be tweaked, no small trend for California’s innovation industries. And following some sort of massive online outage, folks could be scared away from the huge efficiencies created by the interconnected age.
5. Trade Tension
One topic with limited political agreement is national trade policies.
It’s not an simple debate. Is trade’s harm to certain domestic industries and their workers worth the boost to other U.S. businesses that benefit from more free-flowing goods and services? Conversely, how much are we willing to pay for imported goods to save U.S. jobs?
Trade agreements aren’t made or unraveled overnight. But tough anti-trade rhetoric could spook trading partners and/or change investment patterns in trade-heavy U.S. industries.
Don’t forget California’s reliance on trade. Any significant rearranging of our nation’s trade philosophy will have a major impact on the state.