A Review of Past Forecasts – Economics
In recent weeks I have taken a look back on forecasts I have made in the past about Media, Technology, Energy and Climate Change. This week I take a look back at some economic forecasts made, particularly those that are still very relevant. I am one of the few, if only futurists that posts the forecasts I made and when I made them. You can see my forecasts here.
October 2008 Thrift will be the New Cool
Well, this certainly became true during the Great Recession. It continues to this day. The consumer has never really lifted the economy up on any consistent basis since the recession ended. The price comparative shopping the Internet provides is one of the reasons for the collapse of physical retail. Coupon use, loyalty programs, and constant sales are all up over 10 years ago. In addition the consciousness around climate change has made people buy less stuff or by second hand. The number of thrift or consignment stores in the U.S. is twice the number of 10 years ago. The millennials are much less materialistic than prior generations and the boomers are downsizing, so this trend will continue
October 2010 Developed countries of the world will increasingly move from an ownership to a rental society this decade.
This forecast was incredibly accurate and this trend will continue. Think of all the manifestations of this today. Buying DVDs to subscribing to Netflix, reading books and watching video for free with an Amazon Prime membership. Using such services as ZipCar instead of owning a car. Using Uber instead of owning a car. CDs to Mp3 to streaming services like Spotify and Pandora. The dramatic increase in new rental properties and a continued lower level of home ownership.
April 2011 Europe and specifically the Euro Zone will be a no growth economic zone for the better part of the decade to 2020.
This has proven to be true up to this point. Any growth is minimal at best and I think will continue to be true through the end of the decade. Many countries still have double digit unemployment and historically high unemployment in the 18-34 demographic. Recession, deleveraging and legacy policies of the 20th century have, are and will be the causes of this to continue. Brexit also adds to this being a reality
November 2011 China’s economy will have great disruption by 2015-2016 as central planning meets the market economy it created.
This was proved to be incredibly accurate. The forecast was made when China was still into double digit GDP growth. When I went on speaking and book tours in China in 2015-2016 the top of mind discussions were about the rapidly slowing economy down to 6%. The Chinese government made some ham-handed moves in reaction in 2015 that only added to the problem. Going forward China still has to find ways to become a consumer and brand export economy. The current economic problem with China today is capital flight out of the country, in addition to slowing growth. China may be the second biggest economy in the world but it will have significant economic bumps in the road in the years ahead.
February 2013 After a disruptive time 2015-2017 there will be a historic bull market 2018-2028
After volatility in 2015 this forecast has proven to be wrong. 2016-2017 has been a bull market so my timing was off. CAUTION: I think that sometime in 2017-2018 there will be a major downward correction in all equity markets it could be a short one or a long one before a bull market might take off around 2020. Again, I am a futurist and have not been great as a market timer. Readers should pay attention to their equity positions in the near term as there are financial, geo-political and social trends emerging that could trigger significant downward pressure.
January 2014 Long term global economic growth will be less than 3% until 2018-2019
Well this one has proven to be totally accurate. There hasn’t been two quarters of 3% economic growth in any developed country in the past three years. The “slow growth” recovery that so much of the economic press write about is really a false comparison between 20th century national economies recoveries and this first global recession. In addition, much of 20th century economics was based upon an underlying principal of scarcity. We are now in the 21st time of abundance. There are so many trends that are counter to 3% growth, including some mentioned above. I do not see 3% sustained growth anytime soon in the U.S. or Europe. It is time that countries and companies recalibrate for the slow grow reality of the next few years.
July 2015 Several Macro Forces will keep GDP and Inflation at low levels for years to come
A continuation of the above forecast. Some of these forces are: the sharing economy, the move to services from products, ever more abundance of supply and what most people forget which is that the Internet is perhaps the greatest anti-inflation technology ever invented. Lastly as I have written here a number of times, the Industrial Age metric of GDP is no longer accurate in the connected digital economy. So while there may be real growth, the old metrics won’t capture it.
So, yes I have been accurate with my long term economic forecasts. Except for the equities markets. Pay attention to that sector of the economy!