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Recessionary Signals?

6 June 2019 Credibility


The World Bank has added its voice to those warning of a worsening outlook for the global economy this year, amid signs that some major economies could experience a recession. While the risk of a full-blown international recession next year with parallels to the 2008 financial crisis remain remote, the International Monetary Fund has warned that the storm clouds are gathering for the world economy
What is changing?

Anecdotal evidence from our global network suggests the recession is already here with falling sales since January in many sectors as a result of consumer fears about geopolitical issues e.g. US-China trade war, Brexit, Middle East issues, countries already in recession and North Korea and Russia's next moves.

Are they right and if they are what can be done about it?

Read on to discover what our robot, Athena, has found on potential recessionary signals and act accordingly, or click any link to read the evidence she found in 2,148 reports, articles and PowerPoints from the Web and Social Media in a few seconds.

If you are new to foresight, we recommend you view this slide presentation first: /wt/theory/all/theory to get the best out of this report.

Quick Summary

The summary visuals below are completely machine produced, showing our robot's global analysis of:

Driving Forces



What is changing?

Potential solutions

Click through to more detail on 'Recessionary Signals' and run collaborative, digital  workshops on these findings and develop your Options here at /optionsanalysis/index/128
We've managed many businesses that were dogs at the beginning of a recession but finished up stars afterwards. Please contact us for a free discussion if you need assistance.

More analysis
This summary analysis draws from our robot's below visualizations of on recessionary signals and draws from different vantage points to tell the story of what's emerging, just like a GPS system.

Cloud: Continued growth is key to economic well-being and staving off possible a possible recession, but most experts are predicting falling GDP in many countries as the year wears on and through 2020 into 2021.

Systems map: There have been warnings of a coming recession from fringe sources for several years but the rising uncertainty, caused mainly by geopolitical issues, has increased uncertainty and is reducing economic growth. The system map shows that at the centre of this uncertainty are fears about Donald Trump, his trade war with China and disagreements with Russia as well as the UK's so far unsuccessful Brexit. These are already having a knock-on effect on global consumption.

Radar chart: All sectors will be seriously disadvantaged by a global recession with only transport, food and agriculture and aerospace escaping the worst while everybody else is forecast to be outside normal operating scales.

Graph-It: Looking further out, by 2025, a near term recession will most likely damage long-term infrastructure investment, less babies will have been born and migration will accelerate to better economic climes, policies will have to change to learn the lessons, and the impact of Brexit will still be being felt, particularly in the UK but also elsewhere.

Spline chart: In the past four years the two presented Trend Wave charts show there has been a significant increase in expert discussions about a potential coming recession. From a relatively stable and healthy global economy in 2015 we now see the experts predicting a recession will most likely occur between now and 2022, with the most votes for 2021.
However, recessions are notoriously difficult to predict and usually begin when surprises and new revelations shock the financial markets. Hence, the World Bank's view that “a worsening outlook for the global economy this year, amid signs that some major economies could experience a recession”, could quickly turn into a stock market and finance rout.

Pie Charts: Athena calculates the current probability of a near-term, global recession as high as 30%: up from 25% in May 2019. A correction could come as soon as this year, but more likely 2020.
Recessionary threats are evolving and gaining traction with a billion and trillion of dollars price tag!

Time to build scenarios and determine your course of action in each potential future scenario we think. Please contact us to find out how we can quickly help your team with this exercise.
Heat map: The Heat Map shows that the UK and Canada are most exposed to a future recession while financial services and the energy sector will be badly impacted through lower consumer demand and governments will also be heavily impacted by lower tax receipts.

Emergent Drivers: Right now, a potential recession is not seen as an immediate threat. Instead opportunities such as AI and India top the global immediacy need. But the economic weather can change quickly. And, reports like that of the World Bank can accelerate fears and become self-fulfilling prophecies.

Geography: Countries also likely to suffer, or already suffering from a recession, include Poland, Turkey, Algeria, Finland, Ireland, Greece, Saudi Arabia and Ghana.

Cities: Cities with the most mentions and that have the most to lose from a global recession are Moscow, Chicago, San Bernadino, Dubai, Atlanta, Cincinatti, Amsterdam, St Louis, Singapore and Las Vegas: half in the U.S.

SWOT: Those who prepare for a recession and ensure they can continue to tack and sail in any weather towards their future, will be far prepared than those who set off with a rickety boat, no plan, no compass and no money to invest in their future.

Should a recession occur research has shown that the winners who emerge from the storm will not have stopped investing in their future. Instead they will have used those investments to become ever more efficient and effective while their rivals cut costs and bail for all their lives only to find that, if they survive, they have lost huge distance to their now over the horizon rivals.

Visuals
For more detailed explanation of the graphics below please click here.

Cloud
Continued growth is key to economic well-being and staving off possible a possible recession, but most experts are predicting falling GDP in many countries as the year wears on and through 2020 into 2021.

System map
There have been warnings of a coming recession from fringe sources for several years but the rising uncertainty, caused mainly by geopolitical issues, has increased uncertainty and is reducing economic growth. The system map show that at the centre of this uncertainty are fears about Donald Trump, his trade war with China and disagreements with Russia as well as the UK's so far unsuccessful Brexit. These are already having a knock-on effect on global consumption.

Radar chart
All sectors will be seriously disadvantaged by a global recession with only transport, food and agriculture and aerospace escaping the worst while everybody else is forecast to be outside normal operating scales.

Graph-It
Looking further out, by 2025, a near term recession will most likely damage long-term infrastructure investment, less babies will have been born and migration will accelerate to better economic climes, policies will have to change to learn the lessons and the impact of Brexit will still be being felt, particularly in the UK but also elsewhere.

Spline
In the past four years the two presented Trend Wave charts show there has been a significant increase in expert discussions about a potential coming recession. From a relatively stable and healthy global economy in 2015 we now see the experts predicting a recession will most likely occur between now and 2022, with the most votes for 2021.

However, recessions are notoriously difficult to predict and usually begin when surprises and new revelations shock the financial markets. Hence, the World Bank's view that “a worsening outlook for the global economy this year, amid signs that some major economies could experience a recession”, could quickly turn into a stock market and finance rout.

Trend Wave - Today


Trend Wave – 4 years ago

Sentiment


The World Bank's view is also supported by the sentiment chart. There are far more negative concerns that positive views. The US economy has started to flash signals of a slowdown, although the risk of recession still appears remote but Donald Trump's tax cuts will soon unwind and companies are warning that the tariffs on China are hurting their bottom lines significantly.

Global Sentiment



Global Sentiment analyses the concurrent mood of the pundits who are reporting on the future. Since pundits generally reflect the mood of society and change society's opinions it is a good indicator of people's current view of the future. Right now, its confirming that confidence is falling in line with the sentiment graph and is at its lowest level for several years. Lack of confidence is the key reason recessions happen!

Economy Watch 


This lagging indicator of emerging change auto-aggregates opinions of our 35,000+ sources on whether the global economy is likely to grow or decline in the future. Right now, its pretty flat after the usual January optimism. Which way it goes in future months will confirm or deny the pundits fears. It is usually the last to turn of the three timeline charts presented here.

VUCA World 


VUCA World is a leading indicator of emerging change. It describes whether reported volatility, uncertainty, complexity and ambiguity of general global current conditions and situations are getting better or worse. Movements up or down in this graph generally presage the same effect in the other two charts presented here, over time. In fact, the negative bounce due mainly to geopolitical concerns in January/February has likely presaged the fall in the other two charts. The chart shows continued steady weakness but nothing to suggest that the World Bank, IMF or our global network are right that economic conditions are worsening to any degree as a result of VUCA emerging changes.  

The combination of these three charts gives you an overall picture of where the global economy is heading. Right now, it's been seemingly worsening and with degrees of uncertainty caused by heightened policy uncertainty, protectionist pressures, and risk of financial market disruptions. It feels like the balloon that's increasingly being stretched until it pops. The Global Sentiment chart seems to be presaging this possibility. The Economy Watch result should be cause for increasing concern.

Sentiment could shift rapidly if a clear and present geopolitical event, caused by a paucity of international leadership and diplomacy shocks the markets. Some of the key fears of the past few months, including a possible war with North Korea or Iran, have yet to resolve themselves and can rise again very quickly.  This coupled with the high-risk combination of record debt, asset bubbles, low growth, potential trade wars, sanctions and nationalism, and limited scope for action could see the global economy spiral into a new crisis. 

The last global recession started with stock markets fearing future lower growth. That is becoming a drumbeat amongst future thinking analysts including the IMF and World Bank.

Pie Charts



Athena calculates the current probability of a near-term, global recession as high as 30%: up from 25% in May 2019. A correction could come as soon as this year, but more likely 2020.

Recessionary threats are evolving and gaining traction with a billion and trillion of dollars price tag!

Time to build scenarios and determine your course of action in each potential future scenario we think. Please contact us to find out how we can quickly help your team with this exercise.

We place the probability as high as 30%: up from 25% in May 2019. A correction could come as soon as this year, but more likely 2020.
Recessionary threats are evolving and gaining traction with a billion and trillion of dollars price tag!

Time to build scenarios and determine your course of action in each potential future scenario we think. Please contact us to find out how we can quickly help your team with this exercise.

Heat map

The Heat Map shows that the UK and Canada are most exposed to a future recession while financial services and the energy sector will be badly impacted through lower consumer demand and governments will also be heavily impacted by lower tax receipts.

Emergent drivers

Right now, a potential recession is not seen as an immediate threat. Instead opportunities such as AI and India top the global immediacy need. But the economic weather can change quickly. And, reports like that of the World Bank can accelerate fears and become self-fulfilling prophecies.

Geography

Countries also likely to suffer, or already suffering from a recession, include Poland, Turkey, Algeria, Finland, Ireland, Greece, Saudi Arabia and Ghana.

Cities

Cities with the most mentions and that have the most to lose from a global recession are Moscow, Chicago, San Bernadino, Dubai, Atlanta, Cincinatti, Amsterdam, St Louis, Singapore and Las Vegas: half in the U.S.

SWOT



Currently, threats and weakness far outweigh strengths and opportunities economically.

Those who prepare for a recession and ensure they can continue to tack and sail in any weather towards their future, will be far prepared than those who set off with a rickety boat, no plan, no compass and no money to invest in their future.

Should a recession occur research has shown that the winners who emerge from the storm will not have stopped investing in their future. Instead they will have used those investments to become ever more efficient and effective while their rivals cut costs and bail for all their lives.

Questions

Evidence

Search term: “social and power" OR sustainability OR responsibility” Use this search term to explore our database for more knowledge and wisdom and latest data and information on the topic.

Implications

recession

economy

rise

international monetary fund

growth

world economic forum

rate

scenario

level

recession looming

policy

Potential Responses

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Sources
Athena used the sources as the top ones to create this report and determined which embedded forecasts are included in this Trend Alert. She found 6,648 forecasts in seconds on 23rd May 2019 to allow us to publish this report in less than two hours. She can turn these into PowerPoint slides and Audio files in thirty minutes too as you wish, or we can prepare a full customized and professionally written brief for you to order covering all these forecasts.

Athena
Athena does show duplicates to aid your understanding of themes as well as contradictory forecasts. She may also show near-duplicates. You can speed read past the duplicates and near-duplicates if you wish, though the latter may show additional information. You can use the contradictory, and likely uncertain forecasts she finds to imagine different scenarios. The future is unpredictable, but we can examine the possibilities and choose our preferable future from the choices she presents. 

Athena is apolitical. She will report forecasts from different viewpoints however distasteful that might be to our own values. Wearing rose-colored glasses is not her purpose; reporting potential futures is. So, we recommend you check her veracity before responding to her extracted forecasts.

Just like humans, Athena can be fallible. Do recognize that you and your associates are biased too. But whereas you tire, make mistakes and only recognize what interests you, she does not. She might miss or misinterpret as you do, but with far less frequency and she'll take uncomfortable truths and alternative ideas in her stride. But, please let us know if you feel her bias can be reduced. We want to do our best for you. And, as with any research, you should check and triangulate her findings for yourself.

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