Publisher’s Note: Tomorrow is December 31st, both New Year’s Eve and the official end of 2024. In case you missed a previous article, Dr. Rick Franza took a break from grading his students and graded himself on predictions he made about a year ago.
Last Thursday, my esteemed colleague, Dr. Simon Medcalfe, provided another of his informative and amusing talks at the annual Hull College of Business’ Economic Forecast Breakfast. His presentation at this time last year inspired me to consult my “crystal ball” and make my predictions for 2024 in this space. Since regular readers know that I stress accountability, it would be hypocritical not to look back and see how I did. Since I am a college professor currently determining my students’ semester grades, I will assign myself a grade for each of my four prediction areas: National Economy; Local Economy; Workplace Trends; and Business of Sports.
National Economy (Overall Grade: A-):
Prediction #1: “While the annual inflation rate has dropped to 3.2% from its high of 9.1% in mid-2022, inflation will remain sticky and likely not reach the Federal Reserve’s target rate of 2% until 2025.”
- Evaluation: Nailed it! Inflation remained at 3% or above for the first half of the year and has hovered around 2.5% since. (Grade: A+)
Prediction #2: “The Federal Reserve will not lower interest rates prior to the fourth quarter (post-election) of 2024. While financial markets have already priced in rate reductions by Summer 2024, the Fed will err on the side of caution and not lower rates until the annual inflation rate is under 2.5%.”
- Evaluation: This prediction was looking good through August, but the combination of lowering inflation and weakening employment led to a 50-basis point (0.5%) reduction in interest rates in September and another 25-basis point reduction in November. These cuts were still much less than what many of the “experts” expected for 2024. (Grade: B)
Prediction #3: “Despite these higher rates, the Fed will get its desired “soft landing.” While the growth of the economy will slow in 2024, it will not turn negative, thus avoiding a recession.”
- Evaluation: Spot on! While the economy slowed significantly (1.3% GDP increase) in the first quarter, it rebounded to GDP increases between 2% and 3% for the remainder of the year. Overall, increases in GDP slowed slightly in 2024 from 2023. (Grade: A)
Local Economy (Overall Grade: B):
Prediction #1: “The CSRA will continue to successfully recruit new business to the area. Investment in workforce development will attract not only manufacturers, but technology and service companies as well.”
- Evaluation: This one hit early. Three major investments were made in the area this Spring, including Syensqos’s new battery material manufacturing facility, StandardAero’s expansion of aircraft services by the Augusta Airport, and GF Castings’ new manufacturing facility being built in Augusta Corporate Park. This was followed up in the Summer with the announcement of Stryten Energy’s plan for a large-scale battery factory. (Grade: A)
Prediction #2: “We will still be waiting for the “cyber tsunami” in 2024. The CSRA continues to build the foundational pieces in education, training, and entrepreneurship to become a cybersecurity power, but it does not happen overnight. However, when the tsunami finally hits, it will be an “overnight success story that was years in the making.”
- Evaluation: We are still definitely waiting for the tsunami. Hard to tell how much progress is being made. (Grade: Incomplete)
Prediction #3: “Federal government investment will be the big story of the economy in the CSRA in 2024. Between the revitalization of the Savannah River Site (SRS) and the White House’s “Investing in America” the selection of Augusta as a “workforce hub” will have a major impact on our local economy.”
- Evaluation: This prediction was probably ahead of its time. While the SRS plutonium processing facility is targeted for a 2032 completion, it has yet to become a big story. Also, with the change in presidential administrations, the future of Augusta as a “workforce hub” may be tenuous. (Grade: C)
Managing Your Business/Trends in the Workplace (Overall Grade: B+):
Prediction #1: “While more and more employees will return to the office in 2024, hybrid work will start to take hold as the predominant work model. While employers push for more time in the office and workers push for more flexibility, a hybrid model of 60 to 80% time in the office will result.”
- Evaluation: Fully in-office remains the predominant work model as more companies have pushed a “return to office” (RTO) model. However, we have seen a growth of 37% of all workers adopting a hybrid work model, up from 20% in January 2023, while fully remote options are fading. While hybrid is clearly the trending model, it still has some way to go to unseat the fully in-office model. (Grade: B)
Prediction #2: “The role of AI will become better defined in 2024. Automation will take on an increasing role in standardized work, which will impact many lower-skilled positions.”
- Evaluation: AI is definitely being adopted rapidly in many industries to assist workers in doing their jobs better. There is not enough data to determine if this is eliminating any jobs, but it is certainly being better defined in terms of its use cases. (Grade: B).
Prediction #3: “Resilience and diversification in supply chains will become more prevalent in 2024. While the pandemic exposed supply chain deficiencies, it has taken a while for businesses to address them. Increasing supplier bases, finding more local production facilities, and ramping up risk management plans are among the steps being taken.”
- Evaluation: We had an early test of this prediction in March when the collapse of Baltimore’s Key Bridge disrupted supply chains, particularly for the East Coast of the United States. While the closure of the Baltimore port was problematic, supply chain disruptions were cushioned by excess inventories, real-time logistical planning, and diversified suppliers and manufacturing facilities. Therefore, the bridge collapse ended up having a more limited-than-expected impact. Similarly, the impact of hurricanes, particularly Helene, was muted by more resilient supply chains. (Grade: A)
Prediction #4: “Competing on personalized service will become a leading strategy in business. As AI reduces the need for labor in some areas, people can be redeployed to provide better and more personalized service to win business.”
- Evaluation: Too early to tell. (Grade: Incomplete)
Prediction #5: “Omnichannel marketing will be the pervasive way to do business. In order to maximize customer experience, physical stores, websites, and apps will provide a seamless experience for the best companies.”
- Evaluation: Firms using multiple channels are demonstrating success. According to the Harvard Business Review, 73% of all shoppers favor using multiple channels to shop. In addition, omnichannel shopping accounts for 27% of all retail sales, and it is pervasive among younger shoppers who are more comfortable with technology. While this may not have come to full fruition yet, it is on the way. (Grade: B+)
Business of Sports (Overall Grade: C):
Prediction #1: “College Football will begin its separation from other college sports. Given the financial behemoth that college football has become, 2024 will initiate a plan for a new structure for the top 40-70 programs separate from the NCAA and its current conferences.”
- Evaluation: Not happening…yet. Issues such as paying college athletes and current conference television contracts will need to be addressed before going forward with such a separation. Because of the big dollars at stake and the current power of the Southeastern and Big Ten Conferences, my timeline was way too aggressive. However, the recent College Football Playoff controversies may bring this to the forefront soon. (Grade: C)
Prediction #2: “2024 will be the year men’s professional golf will undergo significant change. While 2023 provided much turbulence, important negotiations are still ongoing on what the PGA Tour, LIV, and other tours will look like going forward. Locally, Augusta National and the Masters will play an important role in what will ultimately be decided.”
- Evaluation: Talks are ongoing between the PGA Tour and other international golf entities. However, information on those talks is limited and the negotiations are complex. Similarly to the college football issue, this will likely take longer than I originally predicted due to the immense financial ramifications. (Grade: C)
Overall, my predictions worked out pretty well. Grades of A-, B, and B+ were grades I would have happily taken home to my parents. My C in the “Business of Sports” was disappointing. Next week, I will break out my crystal ball for 2025.
