This recession can be declared officially over. What now?
In my mind, the recession is over. Economists don’t have a true definition of a recession, so no one can really agree when it’s over, but gross domestic product (GDP) is rising. In 2008, when everyone said we were in the deepest part of the recession, U.S. GDP was actually $14.4 trillion, 2.6 percent higher than in 2007. We had three quarters when it went down 1.9 percent, but the numbers should show that we made up that decrease by the end of 2009. So I say it’s over.
It was a tough recession because we had come off of a long bull market economy and people were not accustomed to having downturns. But as recovery happens, we will see new business starts by new, innovative people. My prognosis is, it’s going to be a great next three years. Here are some things to watch during the time ahead.
Emerging Technologies. Social media have changed the way people communicate, and smart employers understand this. Younger buyers, your business’s future customers, must be reached with your business message. Social networking is the way to do so. In the next ten years, the ways of meeting people, making contacts and communicating your message will continue to radically change.
Rebounding Markets. The industries that drove us into recession, banking and housing, are rebounding quickly and leading us out. The automobile industry is also emerging. People have postponed buying cars, and we now have a pretty old fleet. Plus, car companies are now leaner and more capable of sustaining real growth. Healthcare was fairly recession-proof, as were energy and agriculture, and those three markets should remain strong going forward.
Global Recovery. Every time the United States has a recession, our major trading partners do, too. However, China, Brazil and India are much stronger consumer economies than they ever have been. In China’s “recession,” its economy was down from double-digit growth but still grew by eight percent. Brazil and India had brief downturns but are now back. The world will come out of this recession faster than prior ones because those three countries’ economies are so strong.
Deep Talent Pool. The most important thing successful companies do in a recession is to not get beaten down by the present, but focus on the future. Now is the time to lay the basis for success. Unemployment is over ten percent as of this writing, the highest it has been since 1983. That means there is a phenomenal talent pool of highly educated people to draw from to strategically prepare for where you want to be in 18 to 24 months. Use this time to lock up the talent that’s out there.
|Meet the Author
Lowell Catlett is a professor of economics at New Mexico State University, located in Las Cruces, New Mexico, and on the Web at www.nmsu.edu.