Heading into 2009, we can’t help but have our business (and personal) lives dominated by the noise from the recession. It’s no longer called an economic slowdown, and the question is not IF but for HOW LONG. As someone who has lived thru more than a few, this one is certainly different - and harder to predict an end to than others. For Calgary, some of the effects have not been felt - balance sheets have been hit for a shorter period, and everyone is still hoping that it will get better before any major change (layoffs) has to be taken. For the rest of Canada, most have been in recession since mid-2008, while for our U.S. neighbors, it’s been since Dec 2007.
This is good news in a sense, the further in we are, the sooner we will get out. However, it won’t seem like it as we’re going thru it. My intent for this post, is to offer up some ‘predictions’ for the Calgary non-oil and gas based industries to help weather and maybe even take advantage of the current situation - much like an investor might be right now or as the Chinese have a proverb for - OPPORTUNITY RIDES A DANGEROUS WAVE:
It’s not as bad as the media makes it sound
Just as the news did a poor job seeing it coming, they will do a poor job of telling you when it will start to get better. Reports of being like the great depression for example, are just headline grabbers. True the stock market hasn’t fallen this far since then, but until the unemployment rate hits 25% and thousands of banks fails, we’re nowhere close.
It’s localized by location, industry and by what you do
Being an auto worker in Ontario for GM, is not the same as a tech worker in Calgary for example. Sure, some tech workers may lose their jobs but for the most part, it will be a minor reduction - and those unaffected tech workers should keep their heads up and their wallets open to snag great deals.
Fear trumps greed
Most of the problems in the economy have to do with fear. It’s fear that caused the banks to curtail lending, it’s fear that caused the mass selloff in the stock market, and now it’s fear of losing a job that’s going to cause less consumer spending. Don’t let fear rule your life. Unless everyone around is getting let go, you’re probably ok - see the glass as half full rather than half empty - and you’ll see opportunities instead of despair.
All things in moderation
Just as I hope you weren’t on a spending spree before, don’t take my meaning as to go load up on things you don’t need or debt. Easy money and debt caused much of the current problems. But neither should you or your business freeze up either. As a good friend of mine said to me over a couple of recessions - ‘keep the money moving’ and we’ll all be ok.
And finally, neither the fittest nor the richest will thrive during this, it will be the most adaptable
This is borrowed from Sir Terrence Matthews. Whether it’s your job or your business. Being able to adapt and do different things, or do some things differently to protect yourself will likely the key in this economy. Doing the same wrong things well, or using your solid balance sheet for the same things that are not be returning ROI is not the answer to beating this.
So that’s it. It’s a little long but hopefully that makes up for a few posts that I missed while I was busy ‘adapting’.
My best wishes to you for a great 2009, and I hope you adapt and thrive in these ‘interesting’ times. You may end up in a better shape than you or your company started with.