Friday, October 31, 2008

The Ripple Effect is Accelerating the Downturn

This is the fifth of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #5.

I spend much of my working time out in the market(s) assessing developments for my clients. In recent months, I am witnessing that industry after industry is being impacted by the initial problems in the housing industry. Like ripples emanating from a pebble entering the water, or dominoes tumbling the next, industry after industry is being impacted.


The housing problem has devastated the financial industry. The problems of the financial industry has in turn squeezed consumers with the result being retail, tourism, automotive industries, and many others are being adversely impacted. Now, these problems are spreading to a wide variety of manufacturing industries. And now they are spreading to service business where companies in all kinds of industries are demanding significant price concessions from service providers. In the U.S., we now have a multitude of industries in deep pain…many more industries than in recent recessions. Which is why I believe that this downturn will be deeper and longer than currently expected by most.

Up Next: The final of the six reasons for pessimism about the duration and depth of the downturn; The U.S. Recession Shows Signs of Becoming a Truly Global Recession. Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.

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