For more than four decades, Forecasting International (FI) has conducted an ongoing study of the forces changing our world. One of the values of tracking major trends over such a long period is that we usually can see whether sudden shifts are indicators of seismic transitions or merely temporary anomalies or fads. This has made it possible for us to anticipate many specific developments in fields ranging from terrorist studies to the future of commercial laundries.
Part One of the latest edition of FI's periodic trend report tracks economics and society; values, concerns, and lifestyles; energy; and the environment. Part Two (to be published in the May-June 2008 issue of THE FUTURIST) will cover technology, management, the labor force and work, and institutions.
Some of these trends examine different aspects of very wide-ranging developments, such as demographics or the changing energy picture. These may overlap to some degree, but for our purposes it is necessary that each trend stand on its own. Many of these trends can be seen in the world at large; a few are limited to the United States. The goal is to provide a portrait of the general environment in which we live and work, and these trends all merit attention from anyone who must prepare for what lies ahead.
Because this forecast project is ongoing, the authors--and the World Future Society--welcome your feedback.
General Long-Term Economic and Societal Trends
* The economy of the developed world is on a path to grow for at least the next five years. Any interruptions will be relatively short-lived.
** The U.S. economy has been expanding continuously, though often weakly, since the fourth quarter of 2001. GDP grew by 3.2% in 2006, slowing to just 0.7% in the first quarter of 2007.
** Job creation and unemployment numbers are puzzling. U.S. unemployment rates hovered around 4.5% in the first half of 2007, which counts as nearly full employment. But fewer new jobs are being created--about 145,000 new jobs a month in the first half of 2007, compared with 186,000 reported in 2006.
** Inflation remains under control, according to official U.S. reports. Government officials argue that core inflation is a more accurate reflection of long-term price trends than the Consumer Price Index, because the cost of food and energy is so erratic. Current increases in food and energy are due to long-term problems--the continuing imbalance between supply and demand of refined petroleum products and the growing diversion of corn to ethanol production. We believe CPI is now a much better measure of the economy than core inflation. If so, there may be trouble ahead for consumers. However, it seems consumers will continue to keep the economy growing, and we see no prospect of a significant downturn in the near future.
** The world's second economic dynamo, China, continues to whir. Its GDP officially grew by 10.7%--adjusted for inflation--in 2006, with 10.4% forecast for 2007 and 2008. Thanks to China's hot export markets, the country's current-account surplus is huge, equivalent to 10.7% of GDP in 2007, with 9.8% expected in 2008.
In fact, China may be even wealthier than it seems. A study of its gray market in 2005, including "all illegal incomes, questionable incomes, and incomes of dubious origins," suggested the true GDP may be 24% larger than the official numbers. This powerhouse will keep the global economy humming even if the United States cannot.
** Germany, Europe's biggest economy, is performing well. The country's GDP grew by 3% in 2006, its fastest growth since 2000. Inflation is at just 1.9%, and real incomes are rising, if only a little. There are even signs that German consumers are beginning to spend for the first time in years. The Conference Board's leading index for Germany was up 1. …