Enhancing the economic forecast

Economic forecasts play indispensable roles in organizational decision making. The revenue and expenditure figures contained in annual budgets and long‐range plans are based either explicitly or implicitly on a variety of assumptions about future economic and industry conditions. Tactical decisions, such as advertising, personnel allocations and strategic plans, including acquisitions and divestitures, also rest on tacit or formal expectations about the future economic environment. Yet, all too often, far less effort is devoted to preparing and utilizing economic forecasts than to formulating the budgets, plans, decisions and strategies they support.