How GDP Shrinkage Affects an Integrator Like Me

What might have caused the shrinking GDP… and can you use it to your advantage?

George Tucker

Only a few short days after a second record setting show for InfoComm and hopes of a rising AV market came some souring news.

The revised numbers for Unites States GDP in the first fiscal quarter of 2014 shrank by 3%, the most in five years.

Canary in the Coal Mine?

The morning the news broke, Wall Street reacted as expected with DJIA plummeting nearly 200 points.

The financial networks began revving up to give us a blow by blow of the indices demise and pundits prepared commentaries on which party to blame. AV folks with acidic stomachs wondered aloud if the post show shine had already dulled.

Then, without much ado, the markets edged into positive territory. By the end of the day there was hardly a sign of the morning terror but integrators were left to wonder what it all meant.

The financial markets are canary in the coal mine for us, bad weeks or slipping sectors can mean a mega project put on hold. Up weeks or even rising submarkets in a sliding economy can mean a boon in new builds and upgrade installs.

So, what did this latest muted bad news really mean? The talking heads on networks like Bloomberg, Fox News, and CNBC all seemed to concur that the loss was already ‘baked in’ to many analysts forecasts. That damnable past winter lowered all our expectations.

Polar Vortex Effect

The damnable Polar Vortex enveloped great swaths of the U.S. with a bitterness and bite that turned us all into frontier shut ins.

Few cars were purchased, new clothes lingered on the racks and electronics stayed freshly boxed in storerooms. Shopping was reduced to only the necessities of food, toiletries and movies (oh, and libations, but that is a given, no?). Folks stayed indoors as much as possible and nested.

The long view weather models are not predicting a similar countrywide freeze out for 2015, they are warning that some regions will get socked. The Southeast in particular is expected to get a rash of severe snow storms and heavy ice.

Regional Reasoning

Now is the time to start planning your market approach to the weather predicted. For the East and Southeast it is nesting time. Sell the approach of energy management and flexible media systems for those long nights and weekends at home. Remote access to light the way and warm up the house should be top on your list of upgrades.

Westward shows lower than normal snowfall and slightly higher temperatures from developing El Nino conditions. As a result there should be an extended use of outdoor space well into the new year. Lighting and AV distribution for these space can be a good sell.

Whether the Weather

While weather predictions can be notoriously hit or miss, working with your clients’ memory of the past winter and meteorological predictions for the coming season can be a benefit for your company. So, go and read up on what the snow did to GDP last year, what your local NOAA center predicts and go make a plan to sell to it.

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