By Steven Syre | GLOBE COLUMNIST JANUARY 03, 2012
A prediction for 2012: A very large percentage of the juicier predictions you’ve already read for the coming year will turn out to be wrong.
Good predictions and forecasts come with details and take risks by seeing something other than more of the same ahead. They are incredibly hard to get right with any regularity, the reason I stay away from the prognostication business.
But it isn’t so hard to put your finger on things that will be worth watching and figure out how to track those developments as they unfold in 2012. At the start of a new year, lots of big-picture issues and smaller stories close to home have my attention.
Start with the broad economy of 2012, the ultimate big-picture unknown. The US economy has started to recover only to stall out - twice! - since the official end of the recession in 2009. We begin this year with several months of real momentum that clearly represent a third opportunity to get on the track of a true recovery. Will it work this time?
Economists are especially reluctant to say. One reason: Europe remains a crisis waiting to happen and it could change everything. But no one can even guess how it will play out in 2012.
So, the US consensus forecast is positive but drab. Economists generally expect slow growth that will not be strong enough to move the unemployment needle very far. Many expect the current pace of growth to slow. Some worry that election-year politics - often a stimulating factor - could actually increase uncertainty and indecision, becoming an economic wet blanket.
All of this is possible, but it is important to point out that the economic herd has missed almost every turn in the recent past. Most economists expected steady improvement at the start of 2011 and did not forecast America’s summer stall. Then many feared a double-dip recession or, more commonly, forecast a muddle ahead, failing to anticipate the strong momentum of the final four months of the year.
A few simple things will tell you a lot about the direction of the economy this year. For one, the four-week moving average of new unemployment claims is one of the most reliable indicators of the short-term future. That number has been shrinking lately, and more progress early in 2012 would be unambiguous good news.
Clear progress in Europe would give America’s economy a real boost. The United States can manage a recession in Europe, but all bets are off in a real financial crisis.
Finally, the price of gasoline - something we see and pay every week - is also an important influence on consumer confidence and could hurt momentum this year. Every time gas prices jump, consumers pull in their horns. Prices at the pump have been steady, but expensive oil approaching or exceeding the $100-per-barrel level poses a threat.
Another development worth watching: how the state’s most important industry works and gets paid. I’m talking about health care changes.
Doctors and hospitals are not just making billing changes. They are reshaping entire organizations in ways that will affect health care and the economy for years to come. Big changes took place last year, and more substantial steps are in store in 2012.
Expect more mergers and consolidation of health services into giant medical networks reacting to pressures to cut costs and accept more financial risk.
One last thing to watch: New products and services from companies in Massachusetts. That covers a lot of territory, but I’m especially interested in Vertex Pharmaceuticals and its new treatment for cystic fibrosis.
Vertex launched its closely followed hepatitis C treatment in 2011 and hopes to win approval for its Kalydeco treatment for cystic fibrosis this year. The drug is on track for a decision by regulators this spring.
Kalydeco would treat a relatively small percentage of patients with cystic fibrosis. But it is the first drug that attacks the underlying defect in the genetic disease and could lead to other treatments that help more people. The drug’s success would be a commercial hit for Vertex and change the way we treat a deadly disease.
Happy New Year. It’s going to be busy in 2012.
SOURCE: BOSTON CAPITAL http://www.bostonglobe.com/business/2012/01/03/business-stories-watch/3sRwBmqZikWhNBi8LKGmSK/story.html
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