Economic clockwork

Economic Clock

Business cycles through seasons, just like the weather.

Whether recession comes in the next six months, the next 16 months, or the next 26 months, a recession is going to come.

What to do? An easy concept is to consider economic cycles like the face of a clock.

12 — We’re at the peak, and the current one has lasted for seven to 10 years. Even through COVID, the economy has flourished. Many businesses failed, yet for every business that failed, a new one took its place. By August 2020, for example, new restaurant openings matched the pace from pre-Covid. But the end of summer is coming.

1 — Beginning of the slow down. Marked by rising interest rates, affordability crises, a seller’s market, and the beginning of real estate oversupply. All are counterintuitive signs that the economy is slowing down.

2 — Definite movement toward economic fall. Stock prices fall. High-quality investments, including defense and gold, do well.

3 — Economic fall always follows economic summer. During this period, you’ll even start to see falling construction prices and an abundance of tradespeople. Yes, that will be a surprise, but it happens every cycle.

4 — The beginning of a recession. The time between fall and spring is a time of survival and caution. This period will be marked by more sellers than buyers, as many people perceive and act on panic moves.

5 — The early period of recessions, and the beginning of economic winter, are marked by tight money, hard-to-get credit, a drop in interest rates, and growing unemployment.

6 — Economic winter. Marked by falling interest rates, falling real estate value, lack of confidence, and most importantly, great deals. Fall and winter will last on average three to five years.

7 — Early signs of recovery. Interest rates continue to fall or plateau. Rents increase. It’s time to buy into a looming recovery.

8 — Early spring is marked by real estate prices starting to rise, and commodities, municipal bonds, and value stocks start to move.

9 — Economic spring is here again! Rising commodity prices are a leading indicator that the economic summer is right around the corner. Spring is also the beginning of the next boom.

10 — Late-cycle sectors appreciate. The trades get busy again. Overseas prices and reserves are seeing price inflation commensurate with growth.

11 — Full blown economic summer. Marked by easier money, more lending, and a seller’s market, summer is — once again — time to make hay.

12 — Back to the peak of economic summer.

“The economy cycles. It has always cycled and always will cycle. This simple symbolism of a clock can clarify for you that cycles will happen, where in a cycle we are, and what to do,” says ActionCOACH Managing Partner Mike McKay.

ActionCOACH CEO Susan Thomson adds, “By understanding business cycles, and with our proven ActionCOACH blueprint and local support, you will be confident of the right choices, the right expertise, and the right strategies being available to you for any situation from the Great Recession to the pandemic. The tools work every time and in every economic season.”

Is your business ready to become recession proof? ActionCOACH is a nine-time consecutive winner of the In Business Executive Choice Awards for Management Training Company. With offices in Madison and Milwaukee, ActionCOACH of Wisconsin is led by Global Hall of Fame Coaches Mike McKay and Susan Thomson. With four certified business and executive coaches, ActionCOACH of Wisconsin has worked with more than 550 businesses throughout Wisconsin and the United States. You can have all that collective knowledge and experience working to help you and your business. Email JosephMuenich@actioncoach.com for your complimentary coaching session or an invite to our massively popular Make More, Work Less series.