ITR Experts Say Recessions

A Recession by Any Other Name…

By ITR Economics on September 7, 2023

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ITR Economics

ITR Economics is the oldest, privately-held, continuously operating, economic research and consulting firm in the US.

Depending on where you are looking, identifying an economic recession is not always concise or straightforward.

At ITR Economics, transparency is one of our Core Values, so it is important that you know how we are determining an economic recession.

  • Per our methodology, Phase D, Recession, is the period of the business cycle when the data trend – dollars, units, an index, etc. – is below the year-ago level and the rate of decline is increasing.
  • When evaluating US GDP, we watch for two quarters of consecutive decline to declare a technical recession.

However, we know that whether or not the economy reaches a technical recession, the impact on you and your business is what really matters as you are working to keep your company viable and your customers and employees satisfied.

Whether you are contending with an official Phase D, Recession, or business is slowing down enough in key markets that it feels like one, you are likely facing some of the below challenges:

  • Staying profitable, or at least solvent, amid deteriorating conditions – Knowing a recession is coming makes this easier to accomplish because you are able to make preparations well in advance.
  • Keeping staff calm, on task, and optimistic – This is much easier to accomplish when leadership itself is authentically optimistic. Knowing how long the pain will last, having a “light at the end of the tunnel,” if you will, will help your leadership team espouse authentic optimism. An industry or company-specific forecast from ITR Economics can provide that light.
  • How can you take advantage of the opportunities that come with a downturn? – You are not the only one grappling with a downturn. Others are, too, and if they are less prepared than you, they may be looking to offload capital equipment or even companies, and valuations will be low.

Be prepared for an economic downturn in 2024.

  • US Industrial Production will contract and undergo Phase D, Recession, throughout that year.
  • Many manufacturing markets will undergo Phase D for at least part of 2024.
  • The wholesale/distribution sector will undergo Phase D for much of 2024.
  • Consumer spending as measured by US Total Retail Sales will undergo Phase D for at least part of 2024.

If you are a business leader, it is likely that at least some aspect of these realities will impact you. We can help you determine what that impact will be, and how you can mitigate the downsides.

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