Soft or Hard Landing: How to Tell Where Your Business Is Headed

Due to several factors influencing the trajectory of the economy, it is often incredibly challenging for business leaders to see what is beyond the horizon for their company. Factors like shifting consumer behavior or geopolitical tensions leave many faced with uncertainty. It can be especially worrying for those on the back side of the business cycle, with some executives unsure if their business is heading toward recession. Amidst this uncertainty, ITR Economics can serve as a vital ally, offering insights and strategies that will help you see the future of your business.

Difference Between Soft Landing and Hard Landing

For businesses in Phase C, characterized by slowing growth, there is still an increase in business activity, albeit at a reduced pace. According to ITR Economics’ business cycle phases, this deceleration will eventually result in either a soft landing or a hard landing.

With a soft landing, the business never dips below the zero line into year-over-year decline. The data will avoid Phase D, Recession, and eventually transition from Phase C, Slowing Growth, back to Phase B, Accelerating Growth.

With a hard landing, the business does go below the zero line and transitions into the unfortunate Phase D, Recession. Following this is Phase A, Recovery, which begins once the year-over-year decline the business is experiencing starts to ease.

So, how do you know whether your business is heading toward a soft landing or a hard landing? That is where ITR Economics comes in!

At ITR Economics, it is our job to serve as Trusted Advisors for our clients. Our team members work closely with your business to become an extension of your staff. We meet with you to review each forecast, strategize around achieving your internal goals, and help instill the confidence your team needs to make the right business decisions at the right time to help the company grow.

Unique Methodology

How do we achieve this as your Trusted Advisors? It starts with our methodology.

With our vast collection of unique leading indicators, we help you determine the leading indicators that relate to your data best. This allows you to foresee the economic trends impacting your business so that you have the opportunity to make proactive decisions and capitalize on the opportunities ahead.

Another way to see what is ahead for your business is to calculate rates-of-change for your data. By calculating the rate-of-change for a particular dataset, you can identify its current phase in the business cycle, which helps in effective preparation. The 12/12 rate-of-change is particularly useful for further understanding your company’s relationship to leading indicators in our database.

Data-Driven Insights vs. News Headlines

Countless news outlets feature headlines about potential impacts on the economy and, in turn, your business. While we all have our trusted sources, these news headlines can often be misleading. Some may even have the potential to negatively influence your decision-making.

Each week on our popular show By the Numbers™, our hosts break down the most prominent headlines and review each with an analytical lens – providing viewers with a clear understanding of the facts and data behind each headline.

With approximately five more years until the 2030s depression, it is more important than ever to put your business in the best possible position to succeed. With help from ITR Economics, your business can get a glimpse into the years to come and plan effectively for the future.