What an interesting time of the year. Half way through the and navigating the usual tumult of credit tightening, pandemic easing, low unemployment, lingering inflation, M&A waffling, generative AI stock market euphoria... So, why the staggering around for direction? Exactly.
While CFO's do the mid-year forecast boogie and assess how the year is going to shape up, one thing that seems to be sticking is tighter credit, particularly for the small businesses to fuel the U.S. economy and job growth. No doubt the large companies have similar issues, just more options and levers at their disposal. Compounding the credit issues (for some) is a lack of conviction on where and how many investment bets to place in the second half of 2023. Capital allocation has been under fire for a while and activist investors are seeking immediate returns. That said, it is hard to change the top line game without credit to invest in new technologies to increase competitive strength.
We continue to see pressure on corporate treasury departments to prune the balance sheet (working capital) for liquidity, sure up credit needs and deliver the investor relations story consistent with long term planning objectives. The hard thing has been grappling with top line revenue calls and sector demand for products and services.. grow, shrink, flat. Good time to keep the auxiliary credit lines buffed up for the battles ahead. Stay tuned ... lots more to come and enjoy a pandemic free summer!
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