Economic Changes in Business Tomas and Eileen. Natural Disasters Businesses get destroyed Businesses are expected to help rebuild after natural disasters.

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Presentation transcript:

Economic Changes in Business Tomas and Eileen

Natural Disasters Businesses get destroyed Businesses are expected to help rebuild after natural disasters which prevents them from making a profit Many economies are unable to rebuild after certain disasters such as earthquakes and tsunamis Disasters force the reallocation of a countries public funds Low levels of economic activities

Disasters in America Colorado fires caused $110 million dollars in damages, and a “break” pause of business for most companies lasting almost two weeks Hurricane Katrina on the Gulf coast in 2005 companies experienced catastrophic losses, and millions of workers in Louisiana, Texas and Mississippi were left jobless Mass unemployment led to a cutback of consumer spending Nearly half of the nations gasoline passes through refineries destroyed by the storm—led to a massive raise in gas prices New Orleans has never regained it’s population and tourist hotspot status it had prior to the storm

How Businesses Prepare For Natural Disasters Creating a plan for emergency Organizing proper insurance Training staff in emergency first aid Have evacuation procedures in place and posted for the public to see Emergency power supplies to protect your business and inventory Follow procedures for anchoring machinery and heavy merchandise

Importance of Economic Forcasting Business forecasting is the process of estimating future business conditions by analyzing past business data It is used to predict sales, market size and stability, employee and salary information, website traffic, inventory, and risk. All businesses use forecasting to some extent, whether to anticipate the needs of their customers, determine whether to launch a new product line or control inventories and supply chains.

Economic Indicators Economic Indicator- Statistic about an economic activity Unemployment Rate Consumer Price Index(CPI) Producer Price Index(PPI) Real GDP Money Supply

Economic Indicators Unemployment Rate - Measures the size of the potential market CPI - Best indicator of inflation PPI - First indicator of inflation GDP and Money Supply - Fed’s use this data to determine current economic conditions and alter the monetary policy by raising or lowering interest rates