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Issues on Our Radar for 2020

Issues On Our Radar for 2020 was published by the Corridor Business Journal on January 27, 2020.

Many of our clients are in a business and life transition phase: rapid growth, family transitions, partner conflicts, acquisitions and asset management. Global political and economic factors impact these critical business issues.  Here are five items that are on our radar in 2020:

  1. Trade & Tariffs: Many Midwest businesses have been affected by the trade war due to ties to agriculture and manufacturing. Understanding short & long-term impacts will be important. The current trade war playing out between America and China has no clear winner yet, but time will tell. Will the trade wars protect national interests and provide advantages to domestic businesses, or will they ultimately hurt local companies, consumers, and the economy?View Article
  2. Workforce: The U.S. has added millions of jobs since the Great Recession, when unemployment touched 10% at its height. Low unemployment is often regarded as a positive sign for the economy. However, an unemployment rate that is too low can have negative consequences such as inflation and reduced productivity.  Accelerating wage inflation caused by low unemployment will dent profits, particularly for small businesses. Record low unemployment has challenged many employers. How long is this sustainable?
  3. Wealth transfer & succession planning: The next 10 to 15 years may bring substantial transfers of wealth through business ownership handoffs across generations and other new ownership structures. The demographics of an aging population will continue to offer new opportunities in some industries, while driving disruption in others. The long-term survival of businesses, and the preservation of the wealth they have built, will depend upon a clear and early focus on strategic succession planning. However, according to the National Association of Corporate Directors, fewer than one in four private company boards say they have a formal succession plan in place. What planning strategies should you consider? Where will the capital come from to transfer these assets?
  4. Government & monetary policy issues: According to Bankrate.com, thirty percent of Americans say the economy is the most important issue when determining how they will vote for president in 2020. Other key considerations include immigration (19 percent), health care (18 percent) and national security (18 percent). What will be the impact of the 2020 election? Central banks must balance the eventual unwinding of monetary stimulus with the need to sustain growth and reduce the risks of market instability that could follow such a move. Can we keep lowering interest rates with record stock market values?
  5. African Swine Fever. With many notable trends in the market today including the yield curve, tariffs, recession risk and swings in oil prices, African swine fever may seem like an unimportant topic. Yet its impact could be increasingly important for the global food supply chain. This disease in Southeast Asia has reduced the world swine population by 25%.  Food inflation in China is at record levels. Is it a matter of time before it starts affecting food prices throughout the world?  What will be the ultimate impact on one of our state’s most important industries?

“History is a relentless master. It has no present, only the past rushing into the future. To try to hold fast is to be swept aside.”

–John F. Kennedy, 35th U.S. president

We will be following these and other key issues throughout 2020, trying to understand how they affect our customers throughout the Midwest.  It will take knowledge and experience to navigate these areas. Visit our website to subscribe to our mailing list to receive upcoming emails on these and other matters.

Maurie Cashman is a member-owner of Agri-Management Services LLC and manages its Aspen Grove Investments brand.