Daily News: July 27, 2012

Report: Factors Contributing to ‘Perfect Storm’ for U.S Businesses

MainStream Management, a global management consulting firm that specializes in financial advisory and performance improvement for middle-market companies, released a report that forecasts an extended stagnated U.S. economy.

The report, “Prospering in Constrained Economic Times,” outlines the factors contributing to economic constraint and offers strategies for businesses to overcome stagnation. These factors will exert downward pressure on asset performance as labor costs increase, productivity growth slows, and government debt and tax policy remain a giant potential headwind. Taken together these factors create a “perfect storm” for U.S. businesses.

“The impact of the vast accumulation of debt is resulting in below average economic growth and a very high likelihood that multiple sectors will deleverage. The alternative is to continue to kick the can down the road, delaying the hard choices and creating an extended period of constrained growth, similar to Japan,” said Joseph P. Patten, founder and chairman of MainStream.

“Either way, it will be difficult for corporations to achieve the financial returns expected by investors. In a fast-growing economy, a rising tide will raise all boats. However, in a stagnated economy, individual corporations need to outperform to experience the same success,” Patten added.

To download a free copy of “Prospering in Constrained Economic Times, Share on FacebookShare on Twitter+1Share on LinkedIn Share