Home economic situation

How is the home economy at the moment? Are there risks of higher unemployment, rising inflation, and increased costs. This can mean your products are worth less abroad or that the cost of resourcing your products is more.

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Overseas economies and trends

Who has power and influence on the global stage? Which countries have strong economies?

According to Dominic Wilson & Roopa Purushothaman, first coining the phrase 'BRICs' to describe what they foresaw as four key economies to emerge within the global market place in a Goldman Sachs report (2003, 8):

"Over the next 50 years, Brazil, Russia, India and China-the BRICs economies-could become a much larger force in the world economy. Using the latest demographic projections and a model of capital accumulation and productivity growth, we map out GDP growth, income per capita and currency movements in the BRICs economies until 2050.

The results are startling. If things go right, in less than 40 years, the BRIC's economies together could be larger than the G6 in US dollar terms. By 2025 they could account for over half the size of the G6. Currently they are worth less than 15%. Of the current G6, only US and Japan may be among the six largest economies in US dollar terms in 2050."

Goldman Sachs report (2003, 8)

The Goldman Sachs report 'Dreaming with BRICS: The Path to 2050' indicates:

• India's growth rate will be the highest -- not China's -- and it will overtake Japan (today the world's second largest economy) by 2032.
• BRICs' currencies could appreciate by 300% over the next 50 years, providing a big tailwind for investors in BRIC assets.
• Taken together, the BRICs could be larger than the U.S. and the developed economies of Europe within 40 years.
• Over the next two decades, BRICs will bring another 200 million people with incomes above $15,000 into the world's economy. That's equal to the combined populations of Germany, France and the U.K.

Seasonality/weather issues

Yes the weather can have a huge impact upon the economy. Just look at what happens when the UK gets a bit of snow and the country grinds to a halt! This costs the economy millions of pounds. Also can you get your goods and services where they need to be on time?

Market and trade cycles

Also there are peaks and troughs in the consumer market - obviously the build-up to Christmas is good, but January and February is very poor. The housing market also dips in the winter and comes back up again at Easter time.

Interest and exchange rates

Interest rates are low in this country currently to try and encourage investment and growth. However, the full interest rate is not passed to the consumer when borrowing, but, ironically, it is passed to us when trying to save. Related to this are:

• Unemployment and labour supply
• Labour costs
• Levels of disposable income and income distribution