Recession vs. Recovery

A variety of salesmen have dropped in on me the last week or so. This being the Christmas season, they are making the rounds, bringing gifts to their customers. The table in our office break room is covered with boxes of chocolates and tins of cookies.

Invariably, as part of the visit, they ask how business is going. When I tell them that things are going pretty good, I get surprised looks. They tell me that at most of their customers, business is way off.

Maybe it’s just that my perspective is different. My company’s overall sales are down about 30% from their peak. So from that perspective, business is terrible. But that’s not my point of comparison. I’m comparing where we are now to where we were one year ago.

At the close of 2008, orders from customers were in free fall. Their requirements were dropping faster than we could reduce capacity. In response we took whole weeks out of our production schedule. We shut down for an entire week at Thanksgiving. We shut down for four weeks in December. We took a week off in February, and two weeks off in March. And every time we shut down, another round of people were laid off. It felt like we were on the edge of a precipice.

Finally, in April our business started to pick up again. Just as important, our production capacity was reduced to the point where it balanced with demand again. Since then, our order book has gotten a little stronger, allowing us to call some of the people back off layoff.

Fast forward to the end of 2009. Thanksgiving was a long weekend, not a week. We’re taking the traditional two week maintenance shutdown at the close of this month. The order book for the first quarter of next year is filling up, not getting emptied out by customer cancellations.

I know the economy is not out of the woods yet, that things could turn down again. I know unemployment is still historically high at 10%, and that there are six applicants for every job. Right now, though, things look relatively secure for me and the survivors at my company. So that’s what I choose to focus on in this season of celebration and counting blessings.

The old joke goes that if your neighbor is unemployed, it’s a recession. If you’re unemployed, it’s a depression. I want to add something to that. If you think you are going to lose your job, it’s still a recession. If you think you’re going to survive and stay in business, it’s a recovery.

Here’s to those who are recovering in 2010. It feels pretty good to still be standing. As Winston Churchill put it (in a different context), “there is nothing so exhilarating as to be shot at without effect.”