I have been wrong every year for the past several years about the direction of the economy. I misread the timing and impact of the Fed’s money supply policies, Brexit, and the Trump tariffs, to name a few.
So, I’ve been listening to Kai Ryssdal’s “Marketplace“ program on WBUR, one of two public radio stations here in Boston, pretty much every weeknight as I drive home from work. If I miss it one night, I’ll listen to the podcast on the way to work the next morning.
Each day, he comments on the numbers – what happened in the stock market that day – and shares stories about the economy, often featuring interviews with people who have a particularly good point of view about business or economics.
“Marketplace” is sponsored by a number of different companies; recently, KeyBank has shown up, promoting a research paper that they published in the fourth quarter, 2019 entitled “Middle Market Under Pressure from Trade Wars, Recession Fears. After I’d heard this message a few times, I thought, “I think I’ll have a look.”
The lead paragraph of KeyBank’s report opens with, “Warning bells are ringing for many middle-market business leaders… Middle market businesses, in particular, are being riled by import and export tariffs, pointedly more so than last year at this time.” Key found that, in September, 2019, nearly half of middle market leaders reported negative impacts from tariffs. At the same time in 2018, only 34% reported negative impact.” Industries worst affected include automotive, technology, and agriculture.
Maybe some of you did better than I did at predicting the economy and you rode the stock market up. If so, good for you. But, whether you did or didn’t, the point is that there is now at least one reputable survey that shows a significant (almost doubling) shift in perspective and we can leverage that in our conversations with clients, something like:
“I saw a recent survey indicating that significantly more middle market company senior leaders are concerned about recession than they were a year ago.” And, then, “Do you agree? How do you see it? How has your view changed in the last year? How do you see 2021? How are your concerns (or lack of concerns) shaping your plans for the balance of this year and for 2021?”
And we can add a PDF of KeyBank’s report to the portfolio of content from we share with clients to stimulate discussion.
So… I’m planning for “recession starting in late 2020/early 2021.” But, then, I’ve been wrong before.
Nick Miller trains banks and bankers to attract and expand relationships with business clients. More profitable relationships, faster. He is President of Clarity Advantage based in Concord, MA. Additional articles on Clarity’s web site.
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