The Economy

If It Can Happen There...

Jan. 20, 2012

Credit tightening and the specter of inflation are having a negative impact on consumer spending in China.

We have been talking about China's inflation problems in our presentations and webinars. China correctly reigned in available credit in an attempt to purge inflation from the economy.

It was necessary and it is the right move.

The follow-on effect is a slowdown in consumer activity, particularly for more expensive durable goods. Expect a gradual slowing of consumer activity in China as we progress through 2012 and into 2013.

The impact will become noticeable in 2013, which is wholly consistent with our global forecast for 2013 and 2014.

China is likely also providing a practical demonstration of what will happen here in the US in 2013 and 2014. Readers should plan now on how to combat a tighter lending market and a slower consumer market as they become manifest in 2013 or 2014.

A suggestion: begin by determining which products are the most resistant to a slowdown in the economy and plan on raising prices on those items in 2012 and into early 2013. Then be prepared to roll back prices some in 2014 if price can be used as a consumer inducement.

We will have more inflation preparation ideas for you in the coming months.

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends.

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.