Despite rampant speculation about the current state of the economy, GHJ’s recent Economic Outlook discussion’s positive tone suggested that things may not be as dire as they seem.

On Feb. 23, 2023, GHJ hosted panelists Cameron Dayne (Fifth Third Bank), Stephen Cheung (Los Angeles County Economic Development Corporation) and Rachel Foltz (Endeavour Capital) for an Economic Outlook discussion — with GHJ Business Resiliency Task Force Leader Emily Meiselas and Private Equity Practice Leader David Sutton serving as moderators. The group provided their insights on various topics, including the slowdown in global economic growth, how to prepare for a recession and current market trends.


Even as global economic growth slows, inflation is still on the rise. This may be due to an increased focus on regionalization, which is one of several direct causes of inflation. Inflation tends to lead to higher interest rates, and the Federal Reserve has indicated that it will continue to tighten monetary policy until it sees signs that inflation has slowed to the target rate. The panel concluded that businesses have also been spoiled by relatively lower interest rates over the past decade, and higher interest rates are likely to be around for some time but may ultimately stabilize at around three percent.


The pandemic-induced supply-chain issues are still correcting, but the power dynamic between consumers and suppliers appears to be shifting back in favor of consumers, particularly in matters related to pricing.

On another positive note, it is worth highlighting that the port congestion in Los Angeles and Long Beach (which account for roughly 43 percent of the U.S.’s ocean-bound freight) has largely been resolved. Further, the Los Angeles import and export markets, generally, are quite strong and are performing at or near the top of metropolitan regions in the country. Although there has been disruption caused by U.S.-China tensions and the Ukraine War, it should be noted that the U.S., and specifically Los Angeles, has adapted by expanding in other global markets.


As the discussion wound down, the panelists proposed prioritizing talent and management teams and to develop proactive, forward-thinking talent. They further discussed the lack of good talent in the marketplace and noted that remote work may lead to productivity issues. This, at least partially, may drive worker demand.

The Los Angeles area lost around 780,000 jobs in the first two months of the pandemic and is still about 25,000 jobs short of pre-pandemic levels. As expected, some of the hardest-hit industries (hospitality, food service, etc.) have been slower to recover. Despite the decline in openings, the job market remains relatively friendly to job seekers, particularly in the personal services and entertainment industries, which are now stronger than they were pre-pandemic.


Because many anticipate a recession in the near future, the panelists also weighed in on best practices to help weather the storm. First and foremost, they suggested that people reframe the way they think about a recession. A recession does not have to be the precipitous drop that has been seen in recent years; instead, it may merely be a slowdown. Additionally, they speculated that the recession will more likely impact certain industries and market niches differently, rather than a broad economic decline that we have seen in prior recessions. It is also considered that disruption can be a “healthy cleanse” and a good opportunity to refocus priorities. All the panelists agreed that the best protection is to be as informed as possible and to make preparations to endure the disruption, including using technology and other tools to build future proof a business.


Overall, the panelists were optimistic despite the recent public market upheaval and further disruption on the horizon. Businesses need to change their mindset, reevaluating how they approach uncertainty and regrowth. Disruption can often provide unique growth opportunities for those that are well-positioned to take advantage of them. The key is to prepare now and prioritize self-assessment and improvement to be in the best position to thrive going forward.

If you have any questions or want to discuss how your business can prepare for economic uncertainty, please contact the experts at GHJ.