Recession Management for Coping with Economic Cycles

All over the world, companies prepare a budget for a new business and guess what the business activities will be like next year. Strangely enough, we tend to assume that starting a new year will not alter anything. What should change between December and January? Hardly anything! As a matter of fact, however, there are always changes imminent in the markets of any business. In this context, seasoned owners and their managers are analyzing if and when we will face an economic slowdown again. Of course, we do not know when a recession will come. But we do know that we will have a recession again as we have had in the last 150 years of industrial development. And we took it for granted that we would see the next recession by the end of 2018 or earlier. How did I know? Because every generation during the last 100 years has had the experience that there was a recession within a period of 10 years—of course with the exception of the war periods. In Europe, the end of the previous recession periods was 1984, 1994, 2002, and 2009. 2001–2002 was a very mild recession—most likely because exports to China were already helping to balance the demand. The recession of 2008–2009 was a very deep, but at the same time very short, recession, due to the substantive infusion of money by Central Banks and Governments all over the world. And 2019 the next recession just within the 10 years cycle was due, but it was 2020 that the COVID-19 crisis hit the world economy. This pandemic caused a downfall by itself. The normal recession came afterward.