In company boardrooms across the country business leaders are charting their course through the current uncertain economic waters. The last few months have been full of speculation about the extent of the emerging economic downturn. What has not been in dispute is that 1999 will see a pronounced slowdown in growth. Evidence of the downturn is already with us. Retail sales volumes in the last quarter of 1998 suffered their first quarterly fall since the end of the 1991-92 recession.
Consumer confidence remains negative and the deterioration in manufacturing output continues.
Even the service sector, hitherto relatively immune, will face uncertainties given Treasury predictions of a sharp decline in total domestic demand growth - from 4 per cent in 1998 to as little as 1.25 per cent in 1999. The consensus of independent forecasts, as surveyed by the Treasury, is for real GDP growth to fall to just 0.6 percent, compared with 3.5 per cent in 1997 and 2.5 per cent in 1999, before growing again in 2000. In some sectors the downturn is already evident. In others it is on its way. PricewaterhouseCoopers works with business leaders across the economy on these strategic risk challenges.