The economy and the business cycle

by Business Case Studies on Tuesday 29th November, 2011

CIMA

The Organisation for Economic Co-operation and Development (OECD), which represents developed economies including the US, UK and Japan, has reported that every economy it monitors has suffered a slowdown during September.

The OECD’s leading indicators index tracks economic growth relative to the long-term trend for individual economies and is designed to highlight turning points in economic activity.  The data for September showed growth slowing in all OECD countries and major developing economies monitored by the group. (BBC, 14th November 2011)

These fluctuations in the business cycle mean that companies need to have contingencies in place to anticipate and respond to changes in the economy.  Management accountants have a key role to play in forecasting and strategic planning.  CIMA, the Chartered Institute of Management Accountants provides the training and skills to manage the complexities of the different phases of the business cycle.

The OECD reports that Japan, Russia and the US saw their economies reverting to trend.  However, Canada, France, Germany, Italy, the UK, Brazil, China, India and the euro area appeared to be falling below their long-term trend.  The OECD expects 0.3% growth in the UK in the last three months of the year, but said the economy could contract by as much as 1%, amid high uncertainty over its projections.  Click here for lesson resources

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