The federal government is trying desperately to take credit for GDP growth. But look underneath the covers. First of all, it's growth from a trough, and second, a lot of it is inventory buildup, not final demand.
The government recently revised first-quarter 2010 growth from 2.74% to 3.73% due largely to upped estimates in inventory growth, which accounted
for 71% of the first-quarter’s total gain according to Mr. Williams. His report goes on to say that revised real growth was 1.09%
for first-quarter final sales, or GDP net of inventory
changes. Inventory gains also accounted for 44% of the 2.39% total
growth in the second-quarter, with real final sales growth of 1.34%.
If inventories don't liquidate, that can cause further contraction, as production will tail off in response to the unsold inventory excess.
More Kool Aid
The government's first estimate of
second-quarter 2010 Gross Domestic Product (GDP) was estimated at 2.39% (down
at an annualized 0.67% net of benchmark revisions) +/- 3% (95%
confidence interval), versus a revised 3.73% (previously 2.74%) estimate
of real annualized growth in the first-quarter. The year-to-year change
in real second-quarter GDP was estimated at 3.17%, up from a downwardly
revised 2.39% (previously 2.42%) in the first-quarter.
Mr. Williams' estimate is actually a contraction of 1.3% versus the official estimate of a
3.2% gain, less-negative than the annual 1.5% contraction (2.4%
official gain) estimated in the first-quarter.
Williams is forecasting an intensified downturn... a second dip to the recession. So what does this mean for distributors?
More Evidence You Need to Create Your Own Growth
Here at Growth Wizards, we know you're getting impatient for the economy to come back. But we do our level best to give you reality that you can deal with. And reality says you will have to create your own "growth" in the market by planning multiple growth initiatives in each of the following strategies:
1. Keep the growth you already got through customer retention techniques
2. Get more share of existing customers
3. Take share by wedging into competitors' customers
4. Get high share of faster growing new segments
5. Create demand with demand awakening marketing techniques
6. Move into Market Adjacencies: geographies, products, services, technology, value chain position, channels
My new book" Discover Your Core, Then Go For More" explains these methods in great detail. I urge you to study these methods, and then realize that you need to learn how to plan and manage multiple growth initiative simultaneously while increasing your productivity dramatically facing into this "new" economic reality.
This is not normally an easy task. I know. I have labored with spreadsheets and used Microsoft Project to manage multiple projects. But you end up doing all the work and communication is extremely difficult.. downright exhausting. The task is to get people to see everything that needs to be done, assign it, track progress and meet milestones. To date, there has been no easy tool for the average businessman. Until now.
Enter Basecamp: the growth initiative accelerator!
Basecamp (www.basecamphq.com) is a project management web application that solves this problem. It's easy and effective. People like using it. You can set up multiple projects with multiple milestones and to do lists. It manages communications by integrating with your email applications. Every time a new task is assigned, team members are notified. You can store critical documents and update them as you move along in the project. You can limit what different people can see. As a CEO... you can see milestones and due dates and to do list progress on ALL projects right on your dashboard.
I'll be covering how to use Basecamp to oversee multiple projects in my Step 5 Video in my 8 Steps to Breakthrough Business Growth Series. Combine basecamp with go-to-meeting and you can even plan and stay on top of multiple growth initiatives statewide, countrywide, even worldwide.
You won't want to miss this video series... so consider subscribing now by hitting the "subscribe" link on the top menu.
Deal with reality - create your own growth opportunities by moving out on multiple fronts with focus and firepower.
I just heard a really great mantra from one of my mentors - Business Coach James Malinchak.
He said you have to have the right mind-set, skill set and then get off your ass-ets.
Let's git er done as they say here in Tennessee.
- Neil
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