Do you keep a finger on the pulse of your local economy? If your business depends on a local customer base, it’s important to stay in tune with what your target market is thinking, doing, and spending. In other words, what’s the local economic outlook?
Start with national measures of the U.S. economy—these can give you a birds-eye view of what’s going on. Here are some key figures to watch:
But it’s also essential to drill down to the local level and track what’s going on in your regional and local economy. To monitor the local economic outlook, one of your best tools is simply paying attention.
Open your eyes
One of my friends has taken a regular morning walk around her neighborhood just about every day of the week for the past 15 years. Here’s what she’s noticed.
During the Great Recession, more and more houses emptied out and were taken over by banks. Even the occupied homes became shabbier as consumers pulled in their spending and didn’t invest in home maintenance.
Fewer cars were on the road as more people lost their jobs. Since the last recession was disproportionately hard on men, a growing number of dads took over child-care duties, picking up children from school or taking babies for morning walks.
But despite all this, there was opportunity to be had.
- Resale, consignment, and thrift shopping grew in popularity. Many of these businesses were able to take over abandoned retail space for a song.
- Consumers turned to DIY for everything from haircuts and manicures to car repair. While salons and automotive businesses suffered, do-it-yourself products were hot.
- Property managers profited from maintaining unoccupied homes to keep them from being vandalized.
- Lawn-care companies made money spray-painting the brown lawns of bank-owned homes green to keep up the neighborhoods.
- House flippers profited from snapping up low-priced homes.
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Now, 10 years later, my friend says things are turning around, and she’s finally seeing her neighbors displaying some of the old economic confidence they had pre-recession.
- Home improvement is booming, from house painting to major remodeling and construction.
- New vehicles are popping up everywhere.
- Homeowners are splurging on new holiday decorations.
- Already, there are signs of big-ticket Black Friday spending (such as empty big-screen TV boxes in the trash).
Local economic outlook indicators to watch for
What are some of the economic outlook signs to watch for in your neighborhood? Here are a few things you can do to keep a finger on the pulse of your local economy.
- Visit the local mall or shopping area. How crowded is the parking lot? Are the stores busy?
- Are there lots of UPS and FedEx trucks making deliveries to residences? (This is an indicator of online shopping.)
- Check out local restaurants. Are eateries crowded, with long wait times?
- Are your neighbors patronizing personal services businesses, such as nail salons or hair salons?
- How long are lines at the local Starbucks? Are consumers splurging on $5 lattes?
- Are homes in the community well-maintained?
- Are homes being upgraded—painted, remodeled, or re-landscaped?
- How busy is street traffic during morning and evening rush hours? Are more people going to work?
- Are new businesses opening up, or are for-rent signs proliferating?
By watching these and other signs of the local economic outlook in your community, you’ll know whether consumers are ready to open their wallets, and for what. Then you can take advantage of these trends to benefit your business.