Kaylin Leland is a partner with Fourlane. She works with many different industries, focuses on growth and efficiencies.
The economy is in a recession. Or is it? It depends on who you ask.
Traditionally, a recession is defined as two consecutive quarters of negative economic growth. But what if the recession is only hitting certain industries?
That’s what some economists are saying is happening right now—and based on what we are seeing with our clients across industries, it seems the recession is “slow rolling” through the economy, hitting some industries harder than others.
Explode, shrink and pivot.
Several factors contributing to the recession include the following:
• A disruption in global supply chains.
• A rise in interest rates by the Federal Reserve in an effort to combat inflation; this, in turn, is making it more expensive for businesses to borrow money.
• A cooling-off of the housing market; rising interest rates make it more expensive to buy a home.
With my clients, I’m seeing three scenarios that are definitely not cookie-cutter but very similar to what’s happening across the board:
1. Companies are exploding in growth, primarily due to artificial intelligence (AI) and machine learning. The technology industry is booming; demand for products and services is high, and companies in this sector are hiring and raising salaries.
2. Companies are shrinking due to not being prepared for their future. Supply chain disruptions have led to shortages of raw materials and components, forcing many manufacturers to cut production. I have a client that manufactures tools overseas but did not have a plan in place to face supply chain issues. Although the pandemic was a big part of the problem, the company did not adequately address its issues for the short or long term.
3. Companies are pivoting. These businesses realized that they needed to act ahead of time and as a result are surviving.
So what does this mean for the average worker? It means that the recession is not a one-size-fits-all experience. If you’re in an industry that is being hit hard, you may be feeling the effects of the recession more acutely. But if you’re in a sector that is doing well, you may be able to weather the storm.
Of course, the future is uncertain. It’s possible that the recession will spread to more industries or that it may be starting to ease up. But for now, it’s important to stay informed about the economic situation and to make sure that you are keeping up with career opportunities.
Consider your own future.
Some things we can control—and some are out of touch. If your company is going through a shift, then you need to prepare yourself for life during a recession. Here are four tips:
1. Stay on top of your skills. If you’re in an industry that is being hit hard, you may need to upskill or retrain to stay competitive.
2. Network with people in your field. This will help you stay informed about job opportunities and build relationships that could help you land a new job if you find yourself suddenly unemployed.
3. Keep your résumé updated. This will make it easier to apply for new jobs if you need to.
4. Have a financial cushion. This will help you cover your expenses if you lose your job or if your income is reduced.
A recession is a challenging time, but it’s important to remember that it’s not the end of the world. By taking steps to protect yourself and staying informed, you can better weather the storm and even come out stronger on the other side.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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