INTRODUCTION

 

Today, economic factors are the ones who set the behavior of industries in general, that is, the different changes these factors affect directly or indirectly both producers and consumers; it is the duty of each company, establish constant monitoring of the economic variables as to take preventive or reactive decisions and adapt operational plans in the short term and strategic administrative decisions in the long run, you may stay longer in the industry achieve even generate a competitive advantage over rivals because of lack of management did not survive the inevitable and constant change. Coming up next, we will develop to clarify the current status of the 26 main economic variables that rule the world, focusing on specific situations in Colombia

 

SHIFT TO A SERVICE ECONOMY IN COLOMBIA

 

Colombia’s economic and social development has reached the point at which important decisions must be taken. Following the recession at the turn of the millennium, the country’s economy expanded between 2003 and 2011 at rates that were, with a brief interruption in 2008-09, much higher than those of the previous two decades. Per capita income also rose much faster. By 2012 Colombia – the region’s third most populous country after Brazil and Mexico – was the fourth largest economy in Latin America after Argentina. Growth in income per capita helped reduce the share of the population living in poverty by nearly 10 percentage points between 2002 and 2010. Yet income inequality, especially in rural areas, remained at the high end of the range for Latin America and high compared with most countries in other world regions. Although growth was strong, especially compared to many OECD countries, labour productivity and GDP per capita still lag other countries, including in Latin America. Colombia’s economic history and the emerging signs of its future point to the importance of boosting innovation to raise productivity not only in manufacturing and agriculture but also in service industries, an area in which Colombia’s progress has been weak. Both infrastructure, including advanced information and communication technology (ICT) infrastructure, and transport services have a pervasive influence on the competitiveness of other economic sectors. Innovation offers possibilities for entering new activities as part of a cumulative process of economic diversification. New kinds of increasingly skill-, capital- and knowledge-intensive activities will add to the productivity growth achieved through the increasing efficiency of existing activities.

Information taken in the webpage of

http://www.oecd.org/sti/inno/colombia-innovation-review-assessment-and-recommendations.pdf

 

AVAILABILITY OF CREDIT

 

Bank credit in Colombia and other countries is defined as the credit extended by the banking institutions, including commercial banks and the monetary authorities, i.e. the central bank. The information below includes credit to the private sector only: both firms and households. It does not include lending to the government. Credit is essential for the economy to function well. It funds new investments and allows people to purchase houses, cars, and other items.

 

Colombia hopes to join the selected group of countries that arre members of the Organization for Economic Cooperation and Development (OECD). However, within the requirements to be met, the country is still far from reaching optimum levels, according to Financial Inclusion by  the Opportunity Bank and the Financial Superintendence of Colombia.

Although financial inclusion shows growth, the gap between Colombia and the OECD, by the results recorded in the World Bank Global Findex, remains large. The percentage of Colombian adults that used in 2011 the financial system, had a rate of 30.4%, while in the OECD reached 90%. By 2014, the country had 38.4% versus 94% of international cooperation organization.

 

It was taken from the official website of the magazine “La Republica”

www.larepublica.co

Also in a document of the page off the world Bank http://documents.worldbank.org/curated/en/2006/05/16363711/colombia-credit-reporting-financial-information-infrastructure-colombia-action-plan

 

 

 

LEVEL OF DISPONSABLE INCOME

 

Now a days, Colombia’s disposable income and expenditure levels expanded at a slower pace than regional averages over the period of 2009-2014. Nevertheless, positive reforms to the country’s business climate, coupled with lower levels of political violence, are expected to back growth of income and expenditure in Colombia during the long term. The expansion of the country’s middle class is having a marked impact on spending patterns, although income inequality in Colombia remains extremely high.

 

 

 

The level of disposable income interferes with education because this is also one of the expenses that are involved in the total household income.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information taken in the webpage of

http://www.euromonitor.com/income-and-expenditure-colombia/report

and, the graphic of DANE official website. http://www.dane.gov.co/

 

PROPENSITY OF PEOPLE TO SPEND

 

Is the percentage of income that is spent on goods and services rather than on saving, he household consumption accounts for 52% of final demand of the economy in Colombia, companies and institutiones forms and focuses on the consumer side of people.

Colombians spend much of their money on non-durables such as food and clothing and in durable goods such as TVs, home appliances and tools.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The information was taken from the official website of the magazine "Money". http://www.dinero.com

 

 

INTEREST RATES

 

According to the Investopedia, interest rates are “the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR).” The Interest Rate in Colombia is reported by the Banco de la República de Colombia.

The Investopedia explains that “when the borrower is a low-risk party, they will usually be charged a low interest rate; if the borrower is considered high risk, the interest rate that they are charged will be higher.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investopedia. Definition of Interest Rate. from http://www.investopedia.com/terms/i/interestrate.asp

 

INFLATION RATES

 

Colombia is a upper-middle-income country located in South America. Colombia's GDP was USD 381.82 billion in 2013, making it the world's 29th largest economy. In 2013 Colombia's GDP grew by 4.26%. The current GDP per capita is 9,683.85, in purchasing power adujsted USD. Colombia's unemployment rate, in Jan-2014, was 10.07%, versus 9.34% in Dec-2013. Inflation in Colombia, as measured by the change in consumer price index, in 2013, was 2.02% in 2013 versus 3.18% in 2012.

 

 

 

Colombia economic growth data includes gross domestic product for Colombia, real GDP, and various other indicators and breakdowns measuring change in market value of goods and services in Colombia.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

https://www.quandl.com/collections/colombia/colombia-economy-data

 

UPDATE

 

National Administrative Department of Statistics (DANE) revealed that the Consumer Price Index (CPI) in February 2016 a variation of 1.28% ,.
Between March 2015 and February 2016, the variation was 7.59%, while so far this year, the rate is 2.59%.
In February, education was the largest increase was 5.57%. Within this group, higher enrollments and non-formal education, pensions and other educational costs were more like subgrupo- which pushed the figure, an increase of 6%.
The food group recorded a monthly variation of 1.44%. In February 2015 it was 1.81% and in January 2016 was 2.82%. Subgroups with higher increases were cereals and bakery products (3.38%), and various foods (2.07%).
Housing presented a variation of 0.78%. Gas and utilities formed the subgroup with the highest rate: 1.98%.
Tradable goods in February rose 0.75%, while in the same month of 2015 was 1.14%.
Within basic expenses, other vegetables and fresh vegetables yielded the greatest variation, with 12.26%. The increase was 7.05% rice, and sugar, 6%, among other elements that make up this group.
On the other side of the scale, are apparel and communications groups that yielded the smallest increases, with 0.47% and 0% respectively.
In February, the city recorded the highest CPI was Armenia, with 2.11%. In Barranquilla was 1.53%; Bogota, 1.52%; in Tunja, 1.40%, and in Monteria and Rioacha, 1.34%.
Cities with smaller increases were Cúcuta (0.62%), Bucaramanga and Florence (0.90%), Medellin and San Andres (0.96%) and Cali (0.99%).
So far this year, education was also the group with the biggest rise, with 5.56%. Food increased by 4.29%, while health rose 2.70%.
Within basic expenses, the pope had the largest increase, with 34.79%. The price of oranges has risen 26.07%, while rice and sugar recorded variations of 11.93% and 11.42% respectively.

Taken from: Portafolio. (2016). En febrero, la inflación anual fue de 7,59 %. Portafolio.

 

GROSS DOMESTIC PRODUCT TREND

 

As for the GDP in Colombia, in 2014, the World Bank determined that it was $ 377.7 billion dollars at current prices, today, the International Monetary Fund estimates that for 2015 the GDP will result of $ 427 billion dollars. Since 2014 the GDP growth projections have been declining mainly by the fall in oil prices, as the government said, they had previously expected the Andean economy to expand 4.8 percent in 2015. Colombia’s gross domestic product will rise 4.7 percent this year, but closed 4.2 (Oscar Medina, Andrea Jaramillo, 2014). Likewise, the situation for 2016 is presented, Low oil prices and monetary tightening will constrain GDP growth to 2.8% in 2016 but it will pick up thereafter, Helped by government infrastructure projects and private investment growth (The Economist , 2016).

 

CONSUMPTION PATTERNS

 

Rising incomes and a growing middle class are driving spending on an increasing array of areas, particularly self-indulgent ones such as travel, beauty and health. Improved security conditions, as crime rates fall, are also helping shape a more varied consumer market and encouraging Colombians to get out and spend. Technology is a major growth area across all demographics. Income equality, among the highest in the world, is declining, allowing poorer consumers to spend more widely. We also could go deeper in facts as, Colombian mothers changing feeding habits for their babies, because parents embrace environmentally friendly products for Babies and Infants also with the increase of government programs helping vulnerable children. The highly demand of Smartphones and Tablets from Teenagers, but also teenage pregnancies way up.  As for the adults, avoidance of marriages and couples delay having children, as the age rank increases, the luxury spending desire does too, but with uncertain retirement plans. (Euromonitor, 2015)  

 

UNEMPLOYMENT TRENDS

 

In 2015 unemployment stood at 8.9%, the lowest rate in the last 15 years, while in 2014 stood at 9.1%. Participation rates and occupation were also the highest in the same period by 64.7% and 59.0%, respectively (DANE, 2016). The cities with the lowest unemployment were Bucaramanga with 6.4%; 7.8% Monteria, Sincelejo and Manizales with 8.1%. The highest unemployment recorded it as Quibdo cities with 15.1%, 13.2% and Armenia Cucuta with 12.5%. The country currently has 22.3 million employed and until December was just over 2.1 million people outside the labor market (Redacción Economía, 2016). Trade, restaurants and hotels with a contribution of 1.5 percentage points; Real estate, renting and business activities 0.8; Construction and 0.6 were branches of the economy that punctuated the nation's total employment during the moving quarter from May to July 2015. In addition, an increase in informal employment generation is present above the level formal employment, which is very bad news for the stability and guarantees of social security for Colombians (Economía, 2015).

 

 

WORKER PRODUCTIVITY LEVELS

 

The weighing of productivity levels from all around the world shows that over the past 10 years, productivity growth was almost entirely driven by manufacturing and business sector services. In the case of manufacturing, this reflects the typically higher productivity growth rates. In the case of business sector services, the strong contribution also reveals its increasing share of overall activity ( Organisation for Economic Co-Operation and Development., 2015).But getting deeper on the Colombia’s case, according FEDESARROLLO, and according to the latest report from the World Economic Forum, Colombia is ranked 66 of 144 countries in the latest Global Competitiveness ranking, according to the report of the Private Competitiveness Council (CPC), increases in investment no country has been accompanied by increases in total factor productivity (Dinero, 2015).If we regard the labor market, according to the Monthly Manufacturing Survey, which is  the indicator of labor productivity in the Colombian industry had presented the annual increase of 2% between the first half of 2008 and its 2013 corresponding item.

 

 

VALUE OF THE DOLLAR IN WORLD MARKETS

 

The dollar’s rise, while not extraordinary, is certainly significant. As this is being written, on a year-to-date basis, the dollar is up 8.8% versus the euro, 3.2% against the British pound and 2.4% against the Yen, with almost all of the gains coming since May. A number of factors have likely contributed to the dollar’s ascent (Kelly, 2014). In theory, a strong dollar should help Europe and Japan overcome their deeper economic weaknesses by making their products cheaper on world markets, what it means an overall positive healthy process for global growth. But there are reasons to be cautious, because a strong dollar will squeeze American manufacturers, which have otherwise benefited from the falling of energy prices and rising wages in China. That will weigh on growth in the United States and further suppress inflation, which is already well below the Fed’s target (Porter, 2016). Colombia’s peso has gone from Latin America’s best currency to one of its worst in the past 12 months after the drop in oil prices left it with a widening budget deficit. Its growing current account gap -- the broadest measure of trade -- is forecast to exceed the average for India, South Africa, Indonesia, Turkey and Brazil in 2013, when Morgan Stanley coined the phrase “fragile five” to describe the nations that would suffer the most when the U.S. raised interest rates (Andrea Jaramillo, Ye Xie, 2015).

 

 

STOCK MARKET TRENDS

 

As some of the most important countries for the oil transaction start to change the role of consumers, to suppliers, then, while long down on energy because of oil’s oversupply, it’s still 8% of the world stock market. It means that you may need to own some, just in case. If the preferences are for what does well in good and bad basic oil realities–implying a big market, yet governmental protection, which has a desperately desire for China Petroleum & Chemical SNP -1.89%, also called Sinopec. It’s huge, cheap and should sport a 4% dividend yield this year (Ken Fisher, 2015).

 

 

FOREIGN COUNTRIES ECONOMIC CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://www.heritage.org/index/country/colombia

http://www.heritage.org/index/country/chile

http://www.heritage.org/index/country/venezuela

http://www.heritage.org/index/country/unitedstates

 

IMPORT AND EXPORT FACTORS

 

8 factors that affects imports and exports:

i. The country’s inflation rate:If the country has a relatively high rate of inflation, domestic households and firms are likely to buy a significant number of imports. The country’s firms are also likely to experience some difficulty in exporting. A fall in inflation, however, would increase the country’s international competitiveness and would be likely to increase exports and reduce imports.

ii. The country’s exchange rate:A fall in a country’s exchange rate will lower export prices and raise import prices. This will be likely to increase the value of its exports and lower the amount spent on imports.

iii. Productivity:The more productive a country’s workers are, the lower the labour costs per unit and cheaper its products. A rise in productivity is likely to lead to greater number of households and firms buying more of the country’s products – so exports should rise and imports fall.

iv. Quality:A fall in the quality of a country’s products, relative to other countries’ products, would have an adverse effect on the country’s balance of trade in goods and services.

v. Marketing:The amount of exports sold is influenced not only by their quality and price but also by the effectiveness of domestic firms in marketing their products. Similarly, the quantity of imports purchased is affected by the efficacy of the marketing undertaken by foreign firms.

vi. Domestic GDP:If incomes rise at home, more imports may be bought. Firms are likely to buy more raw materials and capital goods, and some of these will come from abroad. Households will buy more products, and some of these will be imported. The rise in domestic demand may also encourage some domestic firms to switch from the foreign to the domestic market. If this does occur, exports will fall.

vii. Foreign GDP:If incomes abroad rise, foreigners will buy more products. This may enable the country to export more.

viii. Trade restrictions:A relaxation in trade restrictions abroad will make it easier for domestic firms to sell their products to other countries.

 

EXPORTS

 

In 2013 Colombia exported $61.2B, making it the 53rd largest exporter in the world. During the last five years the exports of Colombia have increased at an annualized rate of 8%, from $41.7B in 2008 to $61.2B in 2013. The most recent exports are led by Crude Petroleum which represent 45.2% of the total exports of Colombia, followed by Coal Briquettes, which account for 12.4%.

 

IMPORTS

In 2013 Colombia imported $57.3B, making it the 51st largest importer in the world. During the last five years the imports of Colombia have increased at an annualized rate of 7.6%, from $39.8B in 2008 to $57.3B in 2013. The most recent imports are led by Refined Petroleum which represent 11% of the total imports of Colombia, followed by Cars, which account for 4.07%.

 

TRADE BALANCE

 

As of 2013 Colombia had a positive trade balance of $3.85B in net exports. As compared to their trade balance in 1995 when they had a negative trade balance of $2.97B in net imports.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://atlas.media.mit.edu/en/profile/country/col/#Exports

 

http://www.yourarticlelibrary.com/economics/8-factors-influencing-the-value-of-a-countrys-exports-and-imports/32931

 

POPULATION SHIFTS

Shifts in population create changes in demand. A population shift takes place when people move away from a geographic region, impacting your company sales, and when the population you serve ages or outgrows your product or service.

http://smallbusiness.chron.com/four-factors-cause-shift-demand-56212.ht

Income differences by region and consumer groups:

 

In this map we can see the inequality in the income by countries but we can also see a trend by each region with some little exceptions as we can find out in Latin America. And because of this is that we can see every day de difference in consumer groups and different markets or products developed for the income of every person.

http://www.geocurrents.info/economic-geography/difficulties-calculating-inequality-and-the-gini-coefficient

 

DEMAND SHIFTS FOR DIFFERENT CATEGORIES OF GOODS AND SERVICES

Four facts that cause shifts in demand:

Income

Demand shifts when your customers don't have income to purchase your products or services, and businesses making essentials aren't immune when income dips.

Prices

Prices influence the demand for your products and services, but reducing your prices to rock bottom doesn't always mean sales. Customers love to find bargains, but buyers must perceive the product has value and is worth buying

Preferences and Expectations

Fads and styles change and, unless your company follows the trends, the demand shift may catch you investing in products or services that once sold well but customers now find out of date or unnecessary.

 

INCOME DIFFERENCES BY REGION AND CONSUMER GROUPS​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In this map we can see the inequality in the income by countries but we can also see a trend by each region with some little exceptions as we can find out in Latin America. And because of this is that we can see every day de difference in consumer groups and different markets or products developed for the income of every person.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://es.slideshare.net/MinHacienda/2014-0821-presentacionconvencionasobancaria

http://www.geocurrents.info/economic-geography/difficulties-calculating-inequality-and-the-gini-coefficient

 

PRICE FLUCTUATIONS 

Now a days many products are suffering a height fluctuation in many parts of the world its evident here in Colombia when you see the price of the imported products that since one year and a half increase in almost 75% because of the dollar transaction cost that now a days is really high, some factors that make the dollar price higher are the oil price and the economic crisis that some countries are facing.

 

 

 

 

 

 

 

 

 

 

 

 

 

http://financial-dictionary.thefreedictionary.com/Price+Fluctuation

http://dolar.com.co/dolar-historico/

 

EXPORT OF LABOR AND CAPITAL FROM THE UNITED STATES

 

Labor it’s highly export to the United States but no really from the United States as we know thousands of immigrants arrive to United States every month, what is really export from the united states to other countries is capital to invest in those places and also to buy cheap labor in countries such as china and Vietnam were the big American brands produce their merchandise.

Bibliography:

 

http://smallbusiness.chron.com/four-factors-cause-shift-demand-56212.ht

http://www.geocurrents.info/economic-geography/difficulties-calculating-inequality-and-the-gini-coefficient

 

FISCAL POLICIES

 

Is the policy that follows the public sector regarding its decisions on spending, taxes and over the debt. This policy aims to facilitate and encourage the good performance of the national economy to achieve acceptable or outstanding growth, inflation and unemployment, among other variables levels. It also seeks to avoid fluctuations in the economy.

In economics, fiscal policy can be defined as the use of public spending and tax collection to influence the economy. The two main instruments of fiscal policy are government spending and taxes. Changes in the level and composition of taxation and government spending can influence the following variables in the economy:

• Aggregate demand and the level of economic activity

• The pattern of resource allocation

• The distribution of income.

Fiscal policy refers to the overall effect of the results of the budget in the economic activity. The three possible positions of fiscal policy are expansionary, contractionary and neutral.

http://www.banrepcultural.org/blaavirtual/ayudadetareas/economia/politica_fiscal

http://www.enciclopediafinanciera.com/teoriaeconomica/macroeconomia/politicafisca

 

MONETARY POLICIES

 

Monetary policy in Colombia is governed by an inflation targeting scheme, which aims to maintain a low and stable rate of inflation, and achieve output growth in line with the potential capacity of the economy. This means that the objectives of monetary policy combine the goal of price stability with maximum sustainable growth in output and employment. While inflation targets are credible, these objectives are compatible. Thus, monetary policy complies with the mandate of the Constitution and contributes to improving the welfare of the population.

 

To implement monetary policy in Colombia is necessary to determine the inflation target to be achieved and the policy instruments to be used. From the year 2010 the Board of the Central Bank adopted the goal of long-term inflation that had been proposed from the start of inflation targeting. This target corresponds to a range of inflation 3% ± 1 percentage point, measured by the annual change in the consumer price index compiled by the DANE.

http://www.banrep.gov.co/es/politica-monetaria

http://www.banrep.gov.co/es/como-se-implementa-la-politica-monetaria

 

EUROPEAN ECONOMIC COMMUNITY POLICIES

 

The EEC policies were designed to create a common market among its members through the elimination of most trade barriers and the establishment of a common external trade policy. The treaty also provided for a common agricultural policy, which was established in 1962 to protect EEC farmers from agricultural imports. The first reduction in EEC internal tariffs was implemented in January 1959, and by July 1968 all internal tariffs had been removed. Between 1958 and 1968 trade among the EEC’s members quadrupled in value.Politically, the EEC aimed to reduce tensions in the aftermath of World War II.

However, the immediate objective of the EEC was to achieve the advantages of increased specialisation and division of labour by making the unified area of ‘Inner Six’ a more powerful unit which ensures the harmonious development of economic activities, continuous and balanced growth, increased stability, a more rapid improvement in the standard of living and closer relations among its component states.

Customs Union:

Establishment of a customs union of the six member countries is the crucial provision under the ECM. This customs union signifies the composition of a single customs territory of the participating nations as against the customs territory of each individual nation.

In such a customs union there is complete freedom for the movement of goods and services between the outside world and the partner countries. In a custom union, the members adopt a uniform tariff policy applicable to the outside world, and all tariffs among members are to be abolished.

 

Economic Integration:

The purpose of the Common Market is not limited to the creation of a custom union. It aims at a much broader economic union. The avowed objective of the Treaty of Rome includes free mobility of labour and capital within the Economic Community and harmonisation of national economic policies of the member States, to promote throughout the Community a harmonious development of economic activities and closer relations among its member nations.

 

http://www.britannica.com/topic/European-Community-European-economic-association

http://www.yourarticlelibrary.com/trade-2/economic-community-nature-objectives-and-its-economic-impact/26286/

 

 

ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES POLICIES

 

OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

http://www.opec.org/opec_web/en/about_us/24.htm

 

COALITIONS OF LESSER DEVELOPED COUNTRIES (LDC)

 

The least developed countries (LDCs) are a group of countries classified by the United Nations as least developed in terms of their low gross domestic product per capita, weak human assets and high degree of economic vulnerability.

A country that is considered lacking in terms of its economy, infrastructure and industrial base. The population of a lesser-developed country often has a relatively low standard of living, due to low incomes and abundant poverty. 
 

 

 

 

 

 

 

 

 

 

 

 

 

Image taken from http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_list.pdf
 

 

http://www.investopedia.com/terms/l/ldc.asp#ixzz3zXSBnHN1 
http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=249

 

BIBLIOGRAPHY

 

Organisation for Economic Co-Operation and Development. (2015, May 5). OECD. Retrieved February 2, 2016, from OECD: http://www.oecd.org

Andrea Jaramillo, Ye Xie. (26 de junio de 2015). Bloomberg Business. Recuperado el 2 de Febrero de 2016, de Bloomberg Business: http://www.bloomberg.com/

DANE. (Enero de 2016). Departamento Administrativo Nacional de Estadistica. Recuperado el Febrero de 2016, de Departamento Administrativo Nacional de Estadistica: http://www.dane.gov.co

Dinero. (Enero de 2015). Revista Dinero. Recuperado el 2 de Febrero de 2016, de Revista Dinero: http://www.dinero.com

Economía. (31 de Agosto de 2015). Portafolio. Recuperado el 2 de Febrero de 2016, de Portafolio: http://www.portafolio.co

Euromonitor. (2015, July). Euromonitor Internacional. Retrieved February 2016, from Euromonitor Internacional: http://www.euromonitor.com

Kelly, D. D. (2014, Noviembre 27). Baroon's. Retrieved Febrero 2, 2016, from Baroon's: http://www.barrons.com

Ken Fisher. (6 de Mayo de 2015). FORBES. Recuperado el 2 de Febrero de 2016, de FORBES: http://www.forbes.com

Oscar Medina, Andrea Jaramillo. (2014, December 23). Bloomberg Business. Retrieved February 2, 2015, from Bloomberg Business: http://www.bloomberg.com

Porter, E. (26 de Enero de 2016). The New York Times. Recuperado el 2 de Febrero de 2016, de The New York Times: http://www.nytimes.com/

Redacción Economía. (29 de Enero de 2016). El Espectador. Recuperado el 2 de Febrero de 2016, de El Espectador: http://www.elespectador.com/

The Economist . (2016, Enero). The Economist Intelligence Unit. Retrieved Febrero 2016, from The Economist Intelligence Unit: http://country.eiu.com

 

 

ANALYSIS

 

Of the 21 key economic Variables that we explain before the ones that really affects our industry (service industry) are:

 

• Shift to service economy in the United States: This one is one of the most relevant ones for our industry because the service industry has grew up a lot in the last years and every year it increase its participation in the per capita income of many different countries specially in the “third world countries” but when a big economy such as the US economy shift to a service economy forced the smaller economy’s to be more competitive in order to survive o to grow.

• Level of disposable income: It’s really important for the service industry because let us measure the amount of money that our customers and the general public has ready to expend in services that they want or need.

• Propensity of people to spend: Help the industry to measure how people like to spend their money and that give the way to focus the services for the people.

• Interest rates: Affects directly the finance of the industry and their customers and the capacity of transaction of the money.

• Inflation rates: It’s important because it dictates how much products, services and life cost increase every period and dictated their new prices.

• Money market rates: directly affects the industry prices.

• Gross domestic product trend: it determined the monetary value of the services based in the demand.

• Consumption patterns: guide the industry in order to focus in what most customers want or need.

• Unemployment trends: They affect the industry because they determined how many people has an stable income to buy services but it also is affected by the industry because now a days the service industry is generating lots of new employments.

• Worker productivity levels: Dictated the price of the labor en every country and it also dictated how many employees service needs in each country to be effective and to decide what is better more employees for less price or less employees for a higher price.

• Value of the dollar in the world markets: It reduces or increases the cost of the services and the transaction cost of the local services companies.

• Stock market trends: dictated de value of the companies and the value of the products in the global market.

• Foreign countries economic conditions: Dictated the amount of investment in every region depending on the service consumption or production.

• Import and Export factors: Guide how to export the services.

• Demand shifts for different categories of goods and services: Help the industry to see were to move on when its need.

• Income differences by region and consumer groups: Let the industry decide where to produce the services and where to sell it.

• Price fluctuations: How other industries prices affects our industries.

• Export of labor and capital from the US: Shows US investment in services around the work and the amount of labor they export to make those investments work.

• Monetary policies: Dictated the policies for the markets and that affect the industry.

• Fiscal policies: dictated the regulation for the industry.

• Tax rates: increase the services prices.

• European Economic Community policies: Put or remove trade barriers for services industry and also make and dictated the laws for the industry in their countries.

• OPEC policies: guide services in order to join that market.

• Coalitions of Lesser Developed countries policies: They are the biggest economies in the world and they represent the 75% of the world economy so they are the target of almost every industry and whatever they dictated affected not only the service industry buy the world economy.

 

 

 

To conclude almost all of the key economic variables directly affected the service industry the one we made part of and the other key economic variables indirectly affect the industry because the service industry is determined by the world economy and depends in what it happened with it and that why the industry has to keep a balance between all the stakeholders in order to get a benefit for all.