Hale Stewart (The BondDad Blog) publishes a weekly summary of economic data. He looks at “high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy.”
Stewart is “increasingly convinced that we are past the midpoint of this expansion – probably in the 6th inning, to use a baseball analogy. But that doesn’t mean that I have turned negative, or that a recession is near. Basically it just means that we are getting less “bang for the buck” from the fundamental trends that have underpinned the expansion.”
He concludes that:
There are increasing signs that we are in the latter part of this economic expansion. Despite this, with good numbers in housing and vehicle sales, and especially with gas prices declining again, I still remain positive through the first half of next year.
What does it mean for the sales organization when an expansion starts to slow? Here are three suggestions from Ryan Himmel:
- Examine different scenarios. Do some scenario planning to understand the financial impact of various degrees of recession. You can work with a financial specialist because each “business model needs to be monitored for a five, 10, 15 and 20 percent decrease in sales.” You will need to be prepared ahead of time so when a recession begins you know what to do with your people, your locations, and your projects. Downturns can happen quickly; you want to be ready with a plan.
- Keep your key customers. Next you want to know what actions are required to keep your key customers accounts. If the recession significantly affects their business, you’ll want to work with them to continue your relationship through the trough in the business cycle.
- Seize the moment. Look for opportunities to take calculated risks. If you have a cash cushion and access to external capital, you may have opportunities to take market share away from competitors.
There’s little reason to think we’re on the verge of a recession. But we seem to have passed the midpoint of the current expansion, so it makes sense to begin planning now for more difficult times ahead.