Photo by Adeolu Eletu

Most business owners have enough to monitor day-to-day as it is, from internal performance to competitor activity and hiring decisions. The wider financial markets might not pique your interest or be your strong suit – especially if you’re just starting out. But staying informed on financial news can benefit your business in various ways.

After all, prevailing financial trends can have a significant impact on businesses of all sizes. Understanding this wider context can help you make more strategic decisions, spot better opportunities in the short and long term, and manage risk appropriately.

Below are five key areas of financial news to follow and how they can have a bearing on businesses.

Economic health

Domestic and global economic health can heavily inform business outlook in most sectors. A growing economy tends to go hand in hand with increased consumer spending and business investment – and vice versa, unfortunately.

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Paying attention to expert forecasts alongside key economic indicators such as GDP, employment rate and retail sales can help business owners plan appropriately – for example out efficiencies in the face of economic headwinds.

Inflation and interest rates

It’s no secret that inflation has soared in recent times, tightening purse strings for businesses and consumers alike. But it dropped to 3.9% in November 2023 – lower than expected – and is expected to keep falling through 2024.

Interest rates are often set to control inflation and can impact businesses in several ways. Higher rates can make borrowing more expensive for example, hurting cash flow.

Stock market performance

Stock trading has become more accessible to the average individual in recent decades. But even if business owners aren’t investing or planning to go public, it’s still worth staying abreast of what’s happening with key securities.

Leading stock market indexes such as the S&P 500 can be useful gauges of global economic health, while sector-specific trends also offer valuable insights.

Commodity prices and currency exchange rates

For businesses that trade internationally, currency exchange rates can closely impact how far their money goes. Fluctuations directly affect the cost of imported goods as well as revenue from exported goods going the other way.

Those buying goods such as construction materials and food stuffs should also pay attention to commodity prices, which can be volatile based on various factors influencing supply and demand.

Regulatory updates

Governments regularly introduce new policies and policy updates that have strong bearing on businesses. For example, changes to taxation may heavily impact a business’ bottom line and planning from one financial year to the next.

Updates in areas such as environmental policy can also force businesses to adapt their operations to remain compliant and avoid costly punishment.

 

Do you have your ear to the ground when it comes to financial news? With these five areas in mind for your business, you’ll be better placed to plan for success.

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