Business environment factors - important economic indicators
|Which are the main factors that affect business environment ? What economic indicators are important for investments ?|
|There are more classifications and categorizations of factors affecting business enviroment. Probably the most popular tool for evaluation of business environment is PESTEL analysis. It may be also known as PESTLE analysis. It is focused on:|
Political factors - how government intervenes in the economy (tax policies, fiscal policy, trade restrictions, ...)
Economic factors - determinants of an economy’s performance (GDP growth, inflation rate, interest rates, foreign exchange rates, ...)
Social factors - include cultural trends, demographics, population, ...
Technological factors - pertain to automation, research and development, innovations in technology, ...
Environmental factors - include ecological and environmental aspects (weather, climate, climate change, ...)
Legal factors - laws that affect the company (consumer law, labor law, health and safety law, ...)
The importance of economic indicators depends on type of investment. For one company can be important GDP growth and inflation rate. For other company may be important wages or exchange rates. Investors are usually looking for some level of economic stability.