Ahead of the Curve

CHAPTER 15

Forecasting for Your Own Industry or Company

In parts II and III, we established that there are consistent, repeating cause-and-effect macroeconomic relationships that exist between three major sectors of the economy: consumer spending, manufacturing (industrial production), and capital spending (plant and equipment). We also learned that there are generally reliable leading indicators of primary uptrends, downtrends, and turning points in consumer spending itself. Therefore, forecasting consumer spending can help businesses and investors see around economic corners.

Understanding this chain of economic cause and effect can, I believe, help businesses and investors to predict macroeconomic uptrends and downtrends, or at least understand ...