For Growth, CEOs Must Carefully Manage Price Increases, Labor, Inventory Levels
HOUSTON, TX – November 14, 2022 – Chief Outsiders, the nation’s largest and fastest growing firm offering fractional Chief Marketing Officer services with Fortune 500 experience, today hosted a live discussion with ITR Economics to assess business demand in 2023. Leading economic indicators were analyzed to ascertain what CEOs must do to ensure growth and success in the coming year.
“While select sectors like technology and single-unit housing are showing signs of weakness heading into next year, the broader macroeconomy will be categorized by slowing growth throughout 2023,” said Patrick Luce, Economist with ITR Economics. “While the Federal Reserve’s actions do present challenges to the economy, the impacts of fast-rising interest take time to manifest and are more likely to be felt in 2024, potentially pulling ITR’s mid-decade recession outlook forward.”
ITR’s outlook shows that the manufacturing sector has some unevenness, but is generally positive. However, securing blue collar workers will continue to be a struggle. The tightness within that market was apparent before COVID and it’s still tight currently. The expectation is it will continue to be so throughout the decade.
Meanwhile, maintaining white collar positions will depend on whether workers are in technology or not. The tech troubles we are currently seeing with big layoffs from the likes of Meta and others are likely to continue and persist throughout 2023.
“The main thing CEOs need to take away from the economic data is that the sky is not falling. The economy has generally been sound and it continues to be so. Many, if not most, business sectors are going to have a soft landing throughout the next 12 months,” said Pete Hayes, CMO and principal of Chief Outsiders. “That said, CEOs must be careful about price increases, shoring up their labor - both full and part-time, and closely monitoring inventory levels as supply chain pressure wanes and demand in many sectors softens. There is opportunity to plan depending upon a business’s understanding of where it is in its own cycle, where its industry is, and where the industries that it sells to are.”
First, since caution is warranted concerning any predictions of a recession and continuous inflation, CEOs need to be prudent with price increases. Indeed, there is nothing wrong with a concern for short-term margin protection, but the Purchasing Managers Index (PMI) rate of change has already turned negative which suggests easing demand into 2023 for many sectors. Anticipating the coming disinflation through price setting will make a company a more attractive alternative than more expensive competitors.
Companies should also pay close attention to the labor situation. There are fewer than 0.5 people available to fill any given job opening. Businesses need to invest in the employees they have (through retention policies and rewards) while at the same time looking for new ways to automate relevant human resource processes. Firms should also be willing to source flexible or part-time help through the gig economy. There are now temp or fractional labor resources in almost every position and level of business, from engineering types to the executive suite.
Businesses also need to monitor inventory levels as supply chain pressure wanes and demand in many sectors softens. Buying power has shifted significantly in many sectors in the current post-stimulus environment. It is crucial to avoid getting caught off guard. If possible, businesses should target sectors that are still growing. For example, warehouse construction opportunities are multiplying while office construction numbers decline. If companies can pivot their goods and services to such an adjacent sector, they’ll have a chance to grow.
A recording of the session is available here.
About Chief Outsiders
Chief Outsiders is the leading Fractional CMO firm that helps CEOs accelerate growth through the development and disciplined execution of well-crafted growth plans. The firm has more than 120 part-time, or fractional, Chief Marketing Officers (CMOs) engaged from coast-to-coast. Unlike traditional marketing and management consulting firms, each CMO has held the position of VP Marketing or higher at one or more operating companies, including many Fortune 500 firms. Chief Outsiders CMOs have served on the executive team of more than 1,500 client companies, driving growth strategy and execution plans by offering instant access to talent with highly customized and flexible engagements.
Because of its market-based growth plans, quality of leadership, and experienced team, Chief Outsiders has been recognized for the past nine years by Inc. Magazine as one of the 5,000 fastest growing privately held companies in the US, and was recognized in 2019 as a Forbes Small Giant. Chief Outsiders’ CEO Art Saxby and Principal Pete Hayes are the co-authors of “The Growth Gears: Using a Market-Based Framework to Drive Business Success,” an Amazon #1 best-seller for business owners and CEOs. For additional information about the companies who trust Chief Outsiders as their premier source for business growth acceleration, click here.
About ITR Economics
ITR Economics™ provides the best economic intelligence to reduce risk and drive practical and profitable business decisions. Since 1948, the firm has provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US.
With a knowledge base that spans six decades, ITR Economics has an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. The firm’s reputation is built on accurate, independent, and objective analysis. More information available at www.itreconomics.com.