The Real Economy

A monthly publication for middle market business leaders

The Real Economy

US Housing Outlook Edition

The Real Economy: US Housing Outlook Issue

This edition of RSM’s monthly publication, The Real Economy, features insights from RSM Chief Economist Joe Brusuelas about the outlook for the U.S. housing market, which remains brisk. RSM continues to expect housing starts to be sustained near their current level of 1.25 million at an annualized pace, despite some supply constraints and policy challenges.

In addition, Vincent Voci, senior policy manager for cyber, intelligence, and security with the U.S. Chamber of Commerce, offers insight and practical tips for middle market companies facing the increasing threat of cybercrime. Voci also provides a list of valuable government resources to report breaches.

Finally, The Real Economy explores the implications of increasing U.S.-China trade tensions for midsize companies’ supply chains. Some companies are shifting a portion of their sourcing outside of the world’s second-largest economy to protect against the possibility of additional trade friction.

Internal audit leaders should look at the following issues that may create opportunities and/or threats to strategies, operations, finance, and areas of compliance within their organizations, and help influence managements’ efforts in addressing these areas.

Some considerations may include:

  • For companies in the real estate industry, possible supply and financing constraints present risks that should be considered. Internal audit executives should understand how their organizations’ financing strategies could be impacted by bank regulations as well as their organizations’ exposure in housing projects for certain high-tax states.
  • The housing market and tight labor supply may influence an organization’s ability to attract and retain the right talent. Markets that are in short supply and states impacted by the recent tax changes may influence workplace mobility and talent. Especially for specialized fields and talent, a close look at hiring and retention practices can help with human resource strategies and provide an objective view of these risks.
  • Given possible supply constraints on residential properties, the impact of commercial properties should be considered. Internal audit may review management’s leasing strategies and terms for potential risk.
  • Fluctuations in the U.S. dollar and other currencies are due to increased market volatility and implications from the hedging of commodities. Audit executives will need to look at foreign exchange exposure and strategies used by management, as well as the impact of commodities to business operations.
  • Consider the rising costs for raw materials in the wake of U.S.-China tariffs. Here, audit executives will need to take a close look at the impact of the supply chain and consider how rising costs may impact areas of manufacturing, pricing, and related operations.
  • Consider a review of exposure to potential cyberthreats to company operations and possible internal policy changes to shore up vulnerabilities.

Internal audit has the opportunity to be part of these business conversations and provide insight into how effective these risks are being managed and considered. In addition, internal audit should be educating their respective audit committees on these areas of risk and opportunity.

For a deeper dive into these issues, click on the link below for this month’s issue of The Real Economy.

Download the full issue now.

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About The Real Economy

The U.S. middle market makes up one-third of the country’s economy and employs one-third of its workforce, yet this economic growth engine is often overlooked. As the leading provider of assurance, tax and consulting services to middle market businesses, RSM wants to change the conversation.

The Real Economy is a monthly publication to help the middle market anticipate and address the unique issues and challenges facing their businesses and the industries in which they operate. Written by our chief economist, Joe Brusuelas, and including the insights of professionals throughout the firm, The Real Economy is RSM's answer to making sure the unique needs and opportunities of this important segment of our economy are given the attention they deserve.​

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