Knowing when to make a major investment in your own business isn’t always easy. In some cases it’s easier to estimate in advance when you’ll need to spend on training, new systems or staff. But, there are also times when the signals are too mixed to point in any one direction. Right now though, it seems things are improving for US businesses.
Businesses Feel More Upbeat
The latest data on US business inventories from the Commerce Department, reported that US business inventories rose 0.5% in June. That’s the highest increase in seven months and up from May’s 0.3% gain. Business inventories are an important component of Gross Domestic Product (GDP). And, according to business development experts GR-US.com, it’s likely this stronger rise suggests businesses operating in the US are confident that consumer spending will be positive during the summer and possibly beyond. Knowing when to make that investment in the stock you carry and the staff you need to help sell and deliver it, is a difficult part of business planning. However, it’s also a crucial element of running a successful business and benefitting from an upswing in consumer spending.
July Data Positive, Too
The more timely, but slightly less comprehensive monthly report from the Institute of Supply Management, (ISM), meanwhile, suggests businesses retained that upbeat mood into July. The manufacturing ISM report for July continued to grow, albeit at a slightly slower pace than in June. But, the inventories sub-index was among the elements that improved from June.
That highlights that many businesses are still anticipating a good few months, or even quarters, ahead.
“Several Business Survey Committee Members commented on their concern that inventory may not keep pace with production output going forward,” said chair of the ISM, Timothy R. Fiore, CPSM, C.P.M., in the press release.
It’s Not Too Late
With US GDP growth anticipated to rise sharply in 2017 to around the 2.3% mark according to Goldman Sachs Asset Management, from 1.6% in 2016, it’s likely not too late for any businesses who haven’t yet increased their inventory with a view to grabbing additional profits from upbeat consumers.
Of course, it might mean any profits boost from more confident Americans and tourists won’t be as big as they might have been. But, if you can increase your inventory sooner rather than later – in a sensible fashion – you should still be in line for some good news. Provided that scenario tallies with your own data, that is.
Activity can differ considerably between industries, so, as with all your business decisions, be sure to take the time to make the right one – even if it means you miss out for a short time. After all, it’s much safer to take a calculated risk than one with no evidence for success.