More than five years since the end of the Great Recession, and U.S. businesses, consumers, and investors roared back in 2014.
Last year, stocks hit record highs, employers added 3 million jobs, and the falling cost of oil sank gasoline prices to the lowest levels in five years, spurring consumer spending.
The outlook for small business is bright in 2015, and several factors will provide opportunities to build on the growth of 2014. Business leaders should stay abreast of these five trends to capitalize on the favorable business climate:
1. Falling Oil Prices
The decline in oil prices that began in 2014 will likely continue this year. Falling prices put a damper on oil producers’ profits, deterring them from investing in new drilling or pipelines, but the positive effect cheaper oil has on the U.S. economy will likely outweigh the negative effects on that industry.
Although consumer spending didn’t increase as much as expected over the holiday season, analysts are optimistic it will grow as long as gasoline prices remain low. This provides an opportunity for consumer-facing small businesses. Use promotions to draw in shoppers or clients, and they will be more likely to part with their extra cash.
2. A Growing Global Economy
The World Bank estimates that the global economy will grow by 3 percent this year (up from 2.6 percent growth in 2014). The projected increase is attributed to low oil prices, the stronger U.S. economy, and low global interest rates.
U.S. small businesses should look to new markets to help drive this growth. Specifically, there is great potential in working with Multilatina corporations — companies with a Latin-American base that have operations in more than one country. U.S. producers export three times more to Latin America than to China, and Central and South America buy 50 percent more U.S. goods than the Chinese. U.S. businesses should build alliances with Multilatina companies to reach these important markets. Follow these five tips to get started.
3. The Skills Gap
One of the most important factors for small businesses is the availability of quality workers. Unfortunately, many employers have a hard time filling positions because they can’t find people with the right skills.
In its 2013 Talent Shortage Survey, the ManpowerGroup announced that 39 percent of U.S employers who responded reported difficulty filling jobs because of a lack of available talent. That number was similar for employers worldwide, and it’s likely to increase as unemployment falls.
Skilled trades are the hardest to fill, including sales, IT staff, and accounting and finance positions. For small businesses, this means if you can find the right people, it’s worth spending the time and money to train them on the necessary skills.
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