The Great Recession Is Over….NOT!

It turns out the recession ended more than a year ago and the stock market is on a tear.

Are you feeling better now?

On Monday, the panel of academic eggheads that determines the timing of recessions concluded that, technically, the recession was over in June of 2009. I didn’t know that, did you? Doesn’t feel like it’s over does it?

The Reality

It may be over but we still have a true unemployment of 16% – 17% (FYI those who have quit looking for jobs are not included in the unemployment figures the government puts out – how convenient). 7.3 million jobs have been lost – over one million of them here in Florida. Nearly 2.5 million homes have been repossessed. And at least that many more are in danger of foreclosure. According to the National Home Builders Association home builder confidence is at an eighteen month low. High unemployment, lack of credit, and slow job growth is still keeping people from buying homes.

The Organization for Economic Development says that the current economic growth rate of 2.6% would have to double just to drive down unemployment one percent. Other data suggests that current unemployment will remain high through the middle of this decade.

My clients, who are small business owners, entrepreneurs and sales professionals, tell me a different story. With rare exception, most of them are down ten to thirty percent in sales and profits year to date. That is on top of a double digit decline they experienced in 2009. I wish I had good news for them but I do not.

As I gaze into my crystal ball, which is a dangerous thing to do, I see more of the same for the next twelve months. We may technically be out the recession but we are no means out of the New Normal or the New Economy. True unemployment will remain high for years, homes sales will continue to be sluggish and prices may still go down from here. Businesses, both large and small, are not investing in capital expenditures and are hoarding money with over one trillion dollars sitting on the sideline not circulating.

There is still have quite a bit of deleveraging that must take place. More businesses will have to go out of business, which means more layoffs and continued downward pressure on prices.

If you are a sales rep you will continue to hear the price objection ad nauseam and will be asked to cut your prices if you want the business. Your current customers, clients and patients will buy less and will buy less often. The silver lining is that many of your competitors who don’t have access to credit or have significant cash reserves will fold their tent and go home. Survival being a victory in this economy.

What To Do..What to Do

To climb to the top of the economic mountain you must continue to sharpen your sales and marketing skills by participating in sales training and sales management training and coaching. It is your anti recession antidote. These investments in yourself will pay huge dividends long after this sluggish economy returns to pre-recession levels. In this New Economy there will be victors and there will be victims. More victims than victors.

4 replies
  1. Josh Forehand
    Josh Forehand says:

    Wish I had a good argument to the contrary. Stopped going down to the dried up river to turn over rocks, need the energy for harder work!

    Reply
  2. John Edwards
    John Edwards says:

    This article is spot on. The market is off another 45% for our industry and the customers that are buying are finding it a true buyers market. Competition is dropping prices and the customers see this as the new norm. My position is to make sure that we can demonstrate and provide high value when our clients trade with us. The account managers that continually educate themselves stay ahead of the wave and those that don’t get crushed by it. Thanks for continuing to provide valuable insights Steve. Be the Light.

    John

    Reply
  3. Consignment
    Consignment says:

    Why didnt I think about this? I hear exactly what youre saying and Im so happy that I came across your blog. You really know what youre talking about, and you made me feel like I should learn more about this. Thanks for this; Im officially a huge fan of your blog.

    Reply

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