Dr. Rick Franza, Dean of the Hull College of Business, discusses a different, timely business topic each Monday in this column. This week, he talks about the upcoming Economic Forecast breakfast. The interview has been edited for clarity and impact.
ABD: On Thursday morning you’ll be hosting the 15th annual Economic Forecast breakfast at Augusta University with your economist, Simon Medcalfe. What can we expect from this event?
Rick: This is endowed locally by Wells Fargo and is more community oriented rather than AU-oriented. We already have more than 100 signed up to attend. It’s part of our giving back to the community.
We’re fortunate to have someone like Simon Medcalfe. He has a forecast model he’s been using for a number of years. Not only will it be enlightening, but it’ll also be entertaining. But you might have to have something to wash it down because his humor is very dry.
ABD: His forecast model looks to the year ahead, in this case, 2023. How accurate will it be?
Rick: The conclusion we can make from all forecasts is that they’re all wrong, but he’s closer than most. He looks a lot at employment and the local GDP – those are probably two of the biggest things, and he’ll have some discussion on inflation. He doesn’t have a crystal ball, it’s data-driven. He actually does the work so he can talk about it from the inside.
The University of Georgia also does an economic forecast lunch that’s coming to Augusta in January. Their focus is more national and statewide, but they have someone local talk about the local economy. Simon focuses much more on Georgia and the CSRA. He uses more local and statewide data.
ABD: What can businesses learn from the forecast?
Rick: It will help them better plan for the coming year. It’s not just a snapshot of where we are but of the whole year ahead. It’ll give businesses the ability to see likely scenarios of where the economy is going.
This is the most critical forecast to understand the direction things can go. Again, it’s data-driven. There’s so much information out there of people hypothesizing about what will happen – if you google “the chance of recession,” you’ll see everything from 20 percent to 100 percent.
There are two things about Simon’s forecast: It’s data-driven, not just somebody shooting from the hip; and it’s local. Just because something is happening nationally or even in other parts of the state, doesn’t mean the same thing is happening here.
It helps businesses answer questions like: Will the labor market be tighter or looser? Will consumers continue to spend? What does inflation look like in the year ahead?
Growth and consumer demand affect your top line and your bottom line. The tighter the labor market is, the more wages go up, leading to more inflation. Inflation, recession, and interest rates are the three biggest areas people want to know about because they’re interweaved.
ABD: I know the deadline to register to attend has passed but are there still opportunities available for someone to attend?
Rick: If you haven’t signed up, contact me at rfranza@augusta.edu and I’ll see if we have anything still available.
