Our economic forecasting service positions the UK, Europe and the US within an economic cycle, which typically rotates through the phases of growth; overheat; contraction and recovery.
At a company level, the benefits for businesses are shorter-term, more accurate views on business valuations and the effects of different economic conditions on business valuations. Similarly, industry peers can also be positioned in terms of whether they lead or lag the economic cycle, as this also affects their valuations within their peer group.
Key variables in our economic analysis are forecasting ranges of future interest rates, labour costs, commodity costs, and the demand for construction as we move around the economic cycle. Whilst it is hard to second guess the exact timing of the next downturn, our forecasting guides us to points in time where the economy is at its most vulnerable to external shocks.
Similarly, our models guide us to points in time where industry can be over-confident. At these times, businesses can overreach at the top of the economic cycle, and overpay for takeover targets.