Economic Forecasting with Location Intelligence
August 31, 2021
The COVID-19 pandemic continues to significantly impact the global economy. Data that was once semi-predictable like consumer behavior and economic conditions is now uncertain. Companies now have to contend with economic forecasts that are no longer as reliable as they used to be. Economists often use economic forecasting to predict future trends. Economic development agencies can also benefit from this type of data analysis. These organizations mainly focus on introducing new businesses to communities and business retention. Their strategies often rely on understanding the conditions of the local or regional economy.
Economic development agencies can use location intelligence can be used to enrich economic data, predict future consumer trends, and help businesses grow.
Insights into Current Consumer Behavior
In the past, economists were able to predict consumer behavior based on data collected over years. It’s safe to say that consumer behavior will never be the same as it was pre-pandemic. This makes predicting industry highs and lows extremely difficult in a post-COVID world.
Insights from location intelligence can be used to determine how consumers move around in the world. For example, an economic development agency would be able to study consumer behavior for an area of interest as it relates to the automotive industry and determine who is currently in the market for vehicles. In addition to this, they also could understand where the highest concentration of vehicle shoppers are and whether or not they are in the market for their new or used vehicles. This data would give the organization the insight they need to predict future trends in the automotive industry for that specific region. If the economic forecast for that area reveals that consumers are going to be interested in buying new cars, then the organization can work on creating a strategy to get more car dealerships into the area.
Economic Indicators and Data Enrichment
Many organizations use a variety of forecasting techniques to help them predict a future economic event. Location intelligence can help enrich the data that has already been collected, such as census data, and these insights can provide analysts with where the changes are happening. With this real-world data, economic indicators like housing starts, retail sales, and industrial production can be analyzed on a much deeper level for better forecasting.
For example, an economic development agency has determined that retail sales are on an upward trajectory. They also want to know if this trend will continue in the future. By enriching retail sales data with consumer foot traffic, the organization is able to determine areas of retail growth. If consumer foot traffic and retail sales are predicted to increase, then the economic development agency can strategize how to encourage new businesses to the area.
Helping Businesses Grow
For most organizations, getting the right data they need to accurately forecast what the future will look like is becoming a big challenge. Economic development agencies can help businesses make strategic decisions by using location intelligence to fuel forecasting reports.
If an economic development agency is using location intelligence for a forecasting analysis, they can determine the ebbs and flows of the local and regional consumer markets. Consumer behavior patterns reflect consumer interests and preferences. Let’s say a local organization working with small businesses notices a trend of consumers visiting health food stores and farmer market events. By understanding consumer interests, the organization can assist local entrepreneurs with creating initiatives to expand healthy options for their customers.
When economic data is enriched with valuable insights from location intelligence, organizations such as economic development agencies can help businesses thrive with data and analytics based on consumer behavior in the real world. Economic development agencies have had to use new strategies to help businesses recover from the coronavirus pandemic. Location intelligence is a data solution that can be used to predict future economic trends. For more information on using location intelligence for economic forecasting, speak with one of our experts today.