The Economy Is Shifting. Is Your Business Ready?

If you've tried to make sense of the economy lately, you know how difficult it can be.

One headline says the economy is growing. Another warns about a recession. Interest rates remain high. Everything from groceries to equipment costs more. Businesses are struggling to find experienced workers, while artificial intelligence promises to completely reshape productivity.

For agriculture and manufacturing, the picture can feel even more complicated.

On The Germinate Podcast, Joe Sampson sat down with Jeremy Bess and Patrick Luce, Principal/Senior Economists at Stantec, to look beyond the headlines and discuss what the economic data is actually telling businesses.

Their message wasn't that businesses should panic about what's coming next.

It was that they should be paying attention.

The Headlines Don't Always Tell the Whole Story

Consumer sentiment matters, but Jeremy points out that how people feel about the economy doesn't always match what is happening beneath the surface.

That distinction matters for business leaders.

Over the last few years, inflation, tariffs, geopolitical uncertainty, and recession warnings have created plenty of reasons to be cautious. Yet Jeremy explains that businesses focusing only on negative sentiment risk missing opportunities that still exist within the economic cycle.

Now, however, some of those underlying indicators are beginning to change.

Jeremy and Patrick are watching signs that suggest the U.S. economy could be entering a period of decelerating growth. That doesn't necessarily mean the economy suddenly stops growing. It means growth could happen at a slower pace, creating a different environment for businesses heading into 2027 and potentially 2028.

For business leaders, that means yesterday's strategy might not be the right strategy for tomorrow.

Higher Interest Rates Change the Conversation

One of the most important economic indicators businesses should be watching is also one of the most talked about: interest rates.

When rates rise, borrowing becomes more expensive. That affects families considering a home purchase, but it also changes the math for companies considering new equipment, facilities, employees, or expansion.

The answer isn't necessarily to stop investing.

Instead, Patrick argues that businesses need to become more disciplined about how they invest.

If an investment improves productivity, increases operational efficiency, or helps a company navigate larger structural challenges, it may still make sense. But when borrowing costs are higher, leadership teams need to scrutinize the expected return more carefully.

The question shifts from, "Can we make this investment?" to, "What is this investment going to produce?"

Agriculture Has Its Own Economic Signals

For agriculture, the conversation gets even more interesting.

Joe points out that much of the agricultural economy, particularly across the Midwest, is heavily influenced by two numbers: the price of corn and the price of soybeans.

Those commodity prices affect much more than the farmer.

They influence equipment purchases, manufacturing demand, parts suppliers, dealerships, and countless other businesses connected to agriculture.

Patrick explains that commodity prices can even provide clues about where farm equipment manufacturing may be heading. Their analysis shows corn and soybean pricing can act as leading indicators, with changes potentially showing up in equipment manufacturing several quarters later.

Recent pricing trends have provided some near-term reasons for optimism.

But the longer-term picture isn't as simple.

More Supply Still Needs Demand

Global corn and soybean production has grown substantially, which brings the conversation back to one of the most fundamental economic principles: supply and demand.

More production doesn't automatically translate into stronger economics for producers.

Demand has to keep pace.

Jeremy explains that recent global economic growth has helped support demand, but economic cycles don't accelerate forever. If global growth begins slowing while production remains high, that could eventually put downward pressure on commodity prices.

And when commodity prices face pressure, the effects can move throughout the agricultural economy, including farm equipment manufacturing.

This is why looking at a single economic indicator rarely tells the entire story.

Commodity prices matter.

So do interest rates.

So do input costs, global trade, consumer demand, labor, oil prices, and dozens of other factors.

The real value comes from understanding how those signals interact.

AI Could Change the Productivity Equation

One of the most optimistic parts of the conversation centers on artificial intelligence.

AI's rapid growth isn't happening without consequences. Data centers require enormous amounts of infrastructure, electrical components, land, and resources, which can create additional demand and pricing pressure.

But Patrick sees another side of the AI boom that deserves attention: productivity.

He compares today's AI adoption with the early years of the internet. When looking at productivity growth from the mainstream arrival of generative AI and comparing it with productivity following the rise of the internet in the 1990s, he says the trajectories have shown striking similarities.

Manufacturing productivity has also begun improving after years of decline.

That could become incredibly important for an economy facing another major challenge: labor.

Technology May Help Fill the Labor Gap

Baby boomers are retiring, and when experienced workers leave, businesses aren't simply losing one employee.

They can be losing decades of institutional knowledge.

Replacing that experience isn't easy, particularly when the generations behind them don't have the same population size.

Jeremy believes technology could help businesses bridge some of that gap.

AI, automation, and other productivity tools may allow companies to accomplish more with the people they have. Instead of thinking only about which jobs technology could eliminate, businesses can also ask how technology could augment employees and make their existing workforce more productive.

For agriculture and manufacturing, where labor challenges have already been significant, that opportunity could be especially important.

Sometimes the Best Indicators Are the Simplest

With endless economic reports, forecasts, and headlines available every day, knowing what to watch can become overwhelming.

Patrick recommends keeping an eye on three broad indicators: interest rates, oil prices, and disposable personal income.

Interest rates provide insight into borrowing conditions. Oil prices can signal future pressure across transportation and industrial production. Disposable personal income helps show the financial health and spending ability of the American consumer.

Jeremy makes it even more specific for business leaders.

Watch your bookings, billings, and backlog.

Those three numbers can provide a remarkably clear picture of where a business has been, where it stands today, and where it may be headed next.

Pay Attention, Then Prepare

No economist can remove uncertainty from running a business.

There will always be unexpected events, geopolitical changes, technological disruptions, and market swings.

But uncertainty doesn't mean businesses have to operate blindly.

The goal is to understand the signals, recognize when the economic cycle is changing, and make decisions accordingly.

For agriculture and manufacturing, that could mean being more selective about investments. It could mean prioritizing technology that creates measurable productivity gains. It could mean watching commodity prices alongside global demand instead of focusing on either in isolation.

Most importantly, it means looking beyond the loudest headline of the day.

Because the economy will continue to change.

The businesses paying attention to what the data is actually saying will have a much better chance of changing with it.

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