EAW Consulting: Are we heading for a recession?

The COVID-19 recession was the shortest on record. Now businesses are asking how long the post-COVID economic rebound can last with multiple political and economic issues—and whether we might be heading for another recession.

Inflation is soaring, and the stock market has experienced its worst first half of the year since 1970; economists suggest that a recession might be inevitable. When the value of all goods and services produced during a specific period falls two-quarters back-to-back, we are in a recession. 

In the first three months of 2022, the US GDP dropped by 1.4%. While the UK was not so drastic, is still fell by 0.1% in March 2022, after no growth in February 2022. Global chief economist at the Economist Intelligence Unit, Simon Baptist, said to CNBC “There will be no sudden ‘after’ of stagflation,” referring to a surprise recession after a period of stagflation.

As the war in Ukraine and pandemic disruptions continue to wreak havoc on supply chains, stagflation — marked by low growth and high inflation — will stick around “for at least the next 12 months,” Baptist told CNBC.

Businesses, large and small, typically face declines in sales and profits in a recession. Many will look to cut costs, which results in redundancies and cuts in capital spending, marketing, and research. 

At EAW Consulting, we see something quite different. We’ve observed an increased demand for our outsourced services in previous recessions. This is due to our ability to de-risk customer acquisition costs for clients. Many of our clients offer essential services such as Energy and Telecoms, and by providing them with a no-win, no-fee contract, we can scale their customer base for a guaranteed return on investment.

Some ways that businesses can recession-proof their business include: 

-Protecting cash flow

-Keeping up strong communication with key stakeholders

-Investing in technology

-Keeping your products front of mind with consumers. 

Managing Director at EAW Consulting, Josh Cote ,claims, “it is true that businesses can thrive in a recession,” and post-recession leaders aren’t always who you may expect.

85% of companies that were growth leaders before a recession toppled during bad times, according to a 2010 study by Harvard Business Review.

EAW Consulting shares it is important to remember that recessions are an expected and natural part of the economic cycle, and long-term financial plans will always experience some declining periods. Since World War II, the world has experienced 10+ recessions, typically lasting a year, with periods of expansion and growth being more frequent and longer-lasting.

If you would like to ‘recession-proof’ your business, get in touch with EAW Consulting to understand how we can support you.