Procurement Predictions – We Predict That All Predictions Will Be Wrong

One thing we can predict about 2015 is that most predictions will be inaccurate. I’ve just googled “oil price to halve” within a time range of November 2013 to January 2014 to see if anyone a year ago predicted what has probably been the most significant economic factor of 2014. Nothing.  And here are some interesting tables, (click to view), courtesy of this website  which a year ago pulled together forecasts from major financial institutions.

All five institutions predicted that Brent Crude would be trading at between $100 and $110 in the fourth quarter of 2104. In fact,the price has been around $60 recently. Way, way out. That demonstrates one of the problems with public forecasts by the way, in any field. They all tend to be pretty consensual, because no-on wants to look stupid by going out on a limb alone. Whereas if you're all wrong, at least you are not standing out!

So when I read, as I did over the Christmas period, various commentators almost all saying that the economic outlook is pretty positive, certainly for the UK, excuse me if I don’t place too much trust in them. I’ll exclude Robert Peston of the BBC from that. If you are something of a natural pessimist, which I suspect I am, you might like to read this, where he points out that the UK economy is still horribly unbalanced and in debt. We are basically surviving by selling off our assets to foreigners, which does not sound like a long-term recipe for economic success!

A good old-fashioned sterling crisis seems quite likely, but really, who knows. As for trying to predict what might happen in the EuroZone and whether it will finally collapse under the weight of its own contradictions is a mug's game.

Then we have the natural events that are even less predictable. It seems incredible that ten years have gone by since the dreadful tsunami which killed over 200,000 people in Indonesia and other countries in that region. We’ve probably learnt to pay more attention to supply chain risk, and be better prepared from a business point for view for such appalling events, but in terms of prediction, we still have little chance of predicting such events.

So I’m not going to try and predict too much for the year ahead generally or in procurement terms. But we might look at what would we like to see happen in procurement during 2015 – look out for that in the next week or two!

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