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BizReport : Advertising archives : March 21, 2019

Report indicates more brands are recession-leary

According to a new Gartner report, more businesses are talking about recession. Gartner's experts analyzed the 2018 earnings transcripts of several S&P 500 companies and they note that more businesses used words like "downturn" and "slowdown" in their reports.

by Kristina Knight

The use of those words were 4x more likely to occur during the Q4 2018 earnings calls, note the experts. The focus on recession doesn't seem to be in response to a global issue but to recent turns within the US - like the government shutdown. But, despite their concerns about a possible recession, execs remain optimistic about the overall 2019 US economy.

"S&P 500 company executives are concerned about the risks and uncertainty from government interventions rather than suspecting any global macroeconomic downturn in the near term," said Tim Raiswell, vice president at Gartner's finance practice. "Even while expressing a broadly positive economic outlook, many of the world's largest companies are starting to behave as if they are in a recession. Ford, Pepsi and P&G are all recent high-profile examples of companies announcing large-scale efficiency programs."

The biggest fact in the recession talks is that the Chinese economy slowed during Q4 2018; the experts note that the Chinese economy has gained momentum through the first quarter of 2019. Other factors include Brexit in the UK and conditions in the Middle East and South America.

"Given the lack of realistic precedents in many cases, all parties are largely guessing about the extent to which political rhetoric will become firm policy and what the impact will be on companies' order books," said Mr. Raiswell. "In this uncertain environment and after a long stretch of expansion since 2009, a significant number of leading firms are taking a recessionary stance and making preparations to capitalize on a downturn rather than be a casualty of one."

more information from the Gartner report can be accessed here.

Tags: business recession, business spending, Gartner, SMB trends

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