“The Sky is Falling… well, maybe it’s just a light rain!”

By Gary Reichert

I would feel like Chicken Little, except it appears the sky is actually falling.  

The Producer Price Index is at approximately 8%, the highest since about 1980.  So, the cost to manufacture is up.  We all see this every day when we do the payables in our respective businesses.

The Consumer Price Index is about the same and the highest since 1982.

The Q1 GDP came in at -1.4% when everyone assumed it would be positive, recovering after the pandemic.  The last negative GDP reports were when the pandemic started (when everything shut down) and in 2008.

Either because of this and Fed policy or in addition to, several major financial institutions (Deutsche Bank is referenced) are predicting a major recession.  The optimistic financial institutions are predicting a minor recession.  

In the face of doom and gloom I will pick up the standard and advance, fulfilling my role of little Gary Sunshine.  I am going to champion the cause of contrarianism (wow that is actually a word).  Here is a different version of one of my favorite quotes.

“Our company had a meeting to discuss the recession, and we voted not to have one!” is the word from Zig Ziglar. “The recession is in here,” pointing to his head. “Not out there.”

Yes, deal with and work with reality.  You do not have a choice.  But there is a huge difference between living in the real world and surrendering to it.

When the economy is booming, every business owner thinks they are Rich Uncle Pennybags from Monopoly and a financial genius.  In a tough environment leadership, flexibility, and boldness win.

Recessions and economic stress are a huge opportunity.  Are you really as good as you think you are?  Here is your chance to prove it.  Everyone is financially stressed, including your competition.  This stress magnifies the outcome from every decision, good and bad.  

Most companies will hesitate and pull back to weather the storm, but this can be an opportunity to act boldly.  There is, of course, a difference between bold action and rash action.

If you have a vision, stay the course.  It may take extra phone calls and resources.  Margins may shrink, but fight to keep them.  Continue the things that worked when the sun was shining and add a little more to hold back the storm.

Most recessions appear to last approximately two years.  The question is how will you be positioned when the recession ends?  Will you have maintained and even grown, or will you have contracted?  

You cannot single handedly prevent a recession, but you can set yourself up to take advantage of the recovery.

To demonstrate putting Shield Wall’s money where our mouth is, we are launching digital Spanish issues of several publications and relaunching the Metal Builder brand as a section for the remainder of 2022 and as a NEW MAGAZINE in 2023.  I invite you to join us at Shield Wall Media in choosing to not participate in any upcoming recessions.