Following the longest period of U.S. economic expansion in history, the United States is now expected to enter a significant recession as the country is primarily a consumer-driven economy – 70% of GDP comes from consumer spending. Our global teams revised down their 2020 GDP forecast for the United States outlook from +2.1% to -1.3%, despite a potential $2 trillion stimulus package from the federal government that will support a recovery in the second half of 2020, but will not fully eliminate the economic damage from high unemployment persisting into 2021.
However, firms should continuously revisit their plans in the short- and medium-term as there will be a lasting shock that will reduce demand in 2020 and 2021. However, the lasting shocks from COVID-19 business disruptions will not change the long-term prospects for the U.S. economy outside of the oil sector. Firms with adequate capital should look at this as an opportunity to acquire weaker competitors and improve long-term positioning.
Executives can focus on five strategic imperatives to ensure a healthy recovery in the coming months:
- Assess exposure to the business across customers, suppliers, and geographies
- Protect against working capital and liquidity issues
- Identify resilient sources of demand and competitive advantages
- Identify cost cutting opportunities without damaging the business
- Implement continuous monitoring
Download an executive summary of FrontierView’s current United States Macroeconomic Outlook for 2020 report to help you identify potential pain points and pockets of opportunity for your business through the remainder of 2020 and what you can do to navigate the changing environment.
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