Macroeconomics & Demand — Understanding Seismic Drivers of Change

Demand Planners are currently in the unenviable position of managing demand amid a maelstrom of disruptive change. Technology, interest rates, and geopolitical conflict are combining to change buying behavior, often rendering time series models—that cannot capture emerging and changing external demand factors—redundant. At this present time, chief among these factors of change is rising interest rates. The increased cost of capital is impacting your customers’ ability to finance working capital and inventory, and in turn is impacting demand for your products. In this article, I reveal the ways the current interest rate environment is affecting demand and how traditional planning methods need to be adapted. I also provide an overview of how the cost of borrowing impacts business decisions, both within your four walls and without.