What is business forecasting?

Business forecasting involves making informed guesses about certain business metrics, regardless of whether they reflect the specifics of a business, such as sales growth, or predictions for the economy as a whole. Financial and operational decisions are made based on economic conditions and how the future looks, albeit uncertain.

What is economic forecasting?

Economic forecasting is a process by which policymakers, businesses, and individuals can predict future characteristics of the economy. Forecasting is based on an analysis of key metrics and indicators, such as unemployment, inflation, sales, consumer confidence, and more. Forecasting is vulnerable to bias and subjectivity.

How do business managers use economic forecasts?

Business managers rely on economic forecasts, using them as a guide to plan future operating activities. Private sector companies may have in-house economists to focus on forecasts most pertinent to their specific businesses. For example, a shipping company that wants to know how much of GDP growth is driven by trade.