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Marchand--Don't Let Uncertainty Hinder Planning Processes

March 1999
One morning last month, the daily newspapers simultaneously gladdened my heart and embarrassed me. My pleasure came not from the chagrin—I'm hardly fond of humiliation—but from a report about the unexpectedly strong growth of employment and the likelihood that '99 will bring yet another year of economic growth. I'm delighted by the news, but embarrassed by the memory of a column of mine that appeared in these pages in November.

It offered marketing advice for the imminent downturn that many economists then predicted. I reported their projections, but I hedged: Before winter is over, slower demand may begin to reduce the number of cylinders in the market. Or not.

I'm just not sure the hard times are really waiting for us around the next turn in the road.

OK, so I covered myself against the possibility that their consensus would prove to be wrong, but the truth is, I had concluded that the forecasters were likely correct, and I made suggestions for how marketing executives in printing companies might plan for a contraction.

At the time, a recession seemed certain: events in Korea, Taiwan and Southeast Asia; volatility in our own stock market; and a variety of leading indicators all pointed in the same direction.

So, here I am, four months later, with egg on my face. The sages now say that no big slowdown is in the offing. Instead, they predict another good year.

Good News for Printers
Good news for many printing companies, especially since the labor markets are supposed to remain tight and skilled workers will continue to be hard to find. Sure, caution the forecasters, there are continuing uncertainties.

Brazil's economy may yet collapse, spreading financial chaos and economic misery through South America and perhaps leading to a downturn in the United States. Or Japan's troubles may be as great feared. A meltdown of the second largest economy in the world might bring deflationary forces outside the experience of any practicing economist for more than six decades.

Despite their cautionary tone, the consensus seems to point toward unbroken growth, at least for a while longer. And I am glad, even if I must eat my portion of crow. In doing so, I am in good company.

Plan for What?
Perhaps I've just never fully understood the uncertainty implicit in forecasts. I don't think so. I cannot recall another time when sunny economic news has been accompanied by such dark clouds on the horizon: chaotic currency exchange rate fluctuation, volatile financial markets, historically low commodity prices and threats of meltdown abroad.


 

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