Environmental Analysis

Environmental Analysis: Macroeconomic Variables that Affect Industry

In this environmental analysis I will identify the industry in which my organization operates and show the key macroeconomic variables that affect the industry. I will chose two macroeconomic variables and create two charts that include the last five years and the corresponding industry variables. Finally, I will discuss operating challenges and opportunities for my industry.

The organization I work for Operates as a nonprofit human service delivery industry, through counseling, advocacy, shelter services, and prevention education for survivors of Domestic Violence and Sexual Abuse and the community in general.

Key Macroeconomic Variables that affect the industry I work in are: inflation, unemployment. Since my industry is nonprofit the agency depends on funding from the government (both the federal and state), grants and private community donors. When inflation occurs government spending is cut and victim services are one of the first areas at risk of a decrease in funding.

Macroeconomic Variable Charts

Inflation Rate 2000 2001 2002 2003 2004

United States 3.4 2.8 1.65 2.20 2.7

Canada 2.7 2.5 2.2 2.7 1.77

Unemployment Rate 2002 2003 2004 2005 2006

United States 5.8 6.0 5.5 5.1 4.6

Canada 7.4 7.6 7.2 6.8 6.3

Country Watch (2007)

At any given time the unemployment rates may differ greatly among nations. Two reasons for the difference are 1.)different natural rates of unemployment and 2.)nations may be in different phases of business cycle. McConnell C.R. and Brue S.L. (2004, p. 140). Between 2001 and 2006 the United States unemployment rate was considerably lower than that of Canada. The inflation rate, between 2000 and 2004, shows that the United States was somewhat higher than Canada for the first two years. Then in 2002 the rate dropped below Canada's rate. In 2003 U.S. inflation increased to 2.2 and increased again slightly in 2004, but Canada's rate dropped to 1.7 after staying consistent over the previous four years. Neither one of these country's inflation rates are extraordinarily high or extraordinarily low compared to other nations rates. The increases in the rates of inflation shown on the chart are probably insignificant because the low level of the inflation rates and the very small increases that are documented. That said it is difficult to distinguish between demand-pull inflation and cost-push inflation unless the original source of inflation is known c

Cyclical unemployment is caused by a decline in total spending and is likely to occur in the recession phase of the business cycle. McConnell C.R. and Brue S.L. (2004, p. 137). Server unemployment causes a social catastrophe for our industry in a couple of ways. 1.) There tends to be a decrease in staff because of the need to downsize and an increase in staff leaving for better paying jobs. 2.) With increase in unemployment we see a rise in domestic violence and sexual abuse incidents. In this situation Quanada would experience a decrease