why economic conditions matter for investors and businesses
indicators of economic conditions provide important insights to investors and businesses investors use indicators of economic conditions to adjust their views on economic growth and profitability an improvement in economic conditions would lead investors to be more optimistic about the future and potentially invest more as they expect positive returns the opposite could be true if economic conditions worsen similarly businesses monitor economic conditions to gain insight into their own sales growth and profitability a fairly typical way of forecasting growth would be to use the previous year s trend as a baseline and augment it with the latest economic data and projections that are most relevant to their products and services for example a construction company would look at economic conditions in the housing sector to understand whether momentum is improving or slowing and adjust its business strategy accordingly 