May 17, 2021

9 Signs an Economic Shift is Coming That You Need to Be Aware Of

Despite the economic rollercoaster we've seen over the last year, an economic boom is coming. But that doesn't guarantee success for everyone in every industry.
You have to know the signs to look for and how to take advantage of the shifting markets.
In the digital marketing industry, it's all about mastering communication and selling to your audience. Your audience, like everyone, is at the mercy of so many different factors. One of the biggest influences on buyer behavior? The economy.
But before we can dive into economic predictions... we have to clarify something. There are two types of economists in the world today.

The first focuses on mechanics. This is the 97% of people in the profession who still cling to the idea that people are rational and act like it. They base all their assumptions, interpretations, and forecasts on this.

Now let me ask you. Are you rational 100% of the time? How about the rest of the people you know?

Right... that's what I thought.

So the remaining 3% of economists focus on organics. They see human beings for what we are. Emotional, irrational and, above all else, adaptable.

Although minor motivations vary person to person, humans have the same basic drivers. We do what we can to a) survive and b) reproduce. It doesn't get much more straightforward than that.

So what's the point in clarifying the types of economists before we dive into predictions? Rational behavior can be modeled. Emotional behavior is way more difficult to model and predict.

To further complicate things, the COVID-19 pandemic is still ongoing. Consumer behavior has shifted dramatically. Though we're starting to see some economies open up, there's no putting the genie back in the bottle. What people want has changed. What people need has changed. Your job is to get intimate with your customer's problems and solve them.

And if you want to get more effective than ever before, you have to know what's coming.

The Shape of the Economy in 2021 and Beyond

In the United States, many states still have mobility restrictions in place. Although more and more are opening up slowly over time. Some states' - like Washington, Wisconsin and Indiana -' have paused their reopening.' But far more states are slowly easing restrictions - with much of the east and west coasts being among them. Only two states - Texas and Florida - have had their restrictions entirely lifted as of May 2021. This is going to affect how and where people spend their money.

1. Incomes of the bottom 30% of all households in the US are expected to rise

by as much as 20% as 2021 continues on. The Biden administration's aggressive stimulus packages is part of what's making this happen.

2. They're ready to spend.

People are trying to regain some semblance of a "normal" life. They want to go back to the way things used to be. Even though it's not entirely realistic, they're going to try. They're going to have more money while they do it - creating a perfect storm for brands in the best possible way.'

3. Excess money gets spent.

It's not just about spending to reinstate a sense of normalcy. Stimulus packages and savings are burning holes in Americans' pockets.' People like monetary equilibrium, regardless of world events. If they have insufficient funds, they reduce their spending. If they have excess, they increase their spending.

4. Excess impacts equity.

This ripple effect touches every corner of the United States economy. Real estate prices, consumer prices, wages and even interest rates soar.

5. Investing is up.

A recent Deutsche Bank surveyed people ages 25-34. Half of them planned to spend 50% of their stimulus package on one thing: shares. 40% under 25 years old planned to do the same.' To put that into perspective, the stimulus package was $1.9 trillion. That means that about $170 billion of this will be spent on equities before the year is over.

In a lot of ways, we're already seeing this play out in real-time. Companies like Tesla, Apple and even GameStop already have a significant amount of social media coverage. A simple tweet from Elon Musk moves markets in unprecedented ways.

6. Real estate is up.

7% in Germany. 7% in the UK. 10% in the United States, and even more depending on the region.

7. Inflation is underway.

Global commodity prices have risen an enormous 46% since March of 2020.

8. Innovation is increasing,

thanks in large part due to the pandemic.' As the old saying goes, necessity is the mother of invention.

9. Agility and adaptability will rule.

Growth will come from small to medium businesses with 200 employees. Not large, nationwide organizations who are slow to pivot.

So what does this all mean in a long-term sense?

There's no question that things are difficult right now. But all signs point to things going up. We're on the cusp of a boom that will last for at least four years - if not longer.

The organizations that watch and adapt to consumer behavior will win. Stay agile and innovative. Those that move with the market (rather than dig their heels in) will thrive.