Economic
Changes in
Business
Tomas and Eileen
• Businesses get destroyed
• Businesses are expected to help
rebuild after natural disasters which
prevents them from making a profit
• Many economies are unable to
rebuild after certain disasters such as
earthquakes and tsunamis
• Disasters force the reallocation of a
countries public funds
• Low levels of economic activities
Natural Disasters
• Colorado fires caused $110 million dollars in
damages, and a “break” pause of business for
most companies lasting almost two weeks
• Hurricane Katrina on the Gulf coast in 2005
companies experienced catastrophic losses, and
millions of workers in Louisiana, Texas and
Mississippi were left jobless
• Mass unemployment led to a cutback of consumer
spending
• Nearly half of the nations gasoline passes through
refineries destroyed by the storm—led to a massive
raise in gas prices
• New Orleans has never regained it’s population
and tourist hotspot status it had prior to the storm
Disasters in America
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Creating a plan for emergency
Organizing proper insurance
Training staff in emergency first aid
Have evacuation procedures in place and posted for the
public to see
• Emergency power supplies to protect your business and
inventory
• Follow procedures for anchoring machinery and heavy
merchandise
How Businesses Prepare
For Natural Disasters
• Business forecasting is the process of estimating
future business conditions by analyzing past
business data
• It is used to predict sales, market size and stability,
employee and salary information, website traffic,
inventory, and risk.
• All businesses use forecasting to some extent,
whether to anticipate the needs of their customers,
determine whether to launch a new product line or
control inventories and supply chains.
Importance of Economic
Forcasting
• Economic Indicator- Statistic about an economic
activity
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Unemployment Rate
Consumer Price Index(CPI)
Producer Price Index(PPI)
Real GDP
Money Supply
Economic Indicators
• Unemployment Rate - Measures the size of the potential
market
• CPI - Best indicator of inflation
• PPI - First indicator of inflation
• GDP and Money Supply - Fed’s use this data to
determine current economic conditions and alter the
monetary policy by raising or lowering interest rates
Economic Indicators