Large question mark and gold coins on a wooden scale. 3d render illustration.

Contributed by AFFLINK

A few months back, Michael Wilson, vice president of marketing for AFFLINK, a leading sales and marketing organization for U.S. distributors, answered key questions industry professionals may have regarding recessions.

Because there is more talk — and fear — today about a recession, he has agreed to answer additional questions that distributors and other business professionals in the jan/san, paper, and related industries are now asking, such as the following:

Are a technical recession and a true recession the same thing?

No, they are not. The key difference between a technical recession and a true recession is its severity. If we enter a technical recession, only a few industries may be negatively impacted, and only moderately so. In a true recession, many more industries are affected, and the downturn can be severe for several industry sectors.

What happens during a recession?

People stop spending. Seventy percent of the U.S. economy depends on consumer spending. When people and businesses reduce spending, it can have a ripple effect. For instance, fewer homes being built negatively impacts the lumber, construction, and auto industries, resulting in increased unemployment, and on and on.

Are wages affected by recessions?

Traditionally, more people are looking for work in a recession, so wages either decline or stay the same. However, things are different this time. There are still many industries looking for people. It all depends on how long this recession — if it happens — lasts.

How long do recessions last?

Since World War II, most recessions have lasted about 10 months. The Great Recession of 2008, however, lasted 18 months. This time may be different. How long it goes on may depend on the Ukraine war.

What industries are most impacted by recessions?

The industries traditionally most impacted, or at least first impacted, are the retail industry, restaurants/hospitality, and leisure and travel. However, the tech industry looks like it is also being affected this time.

“Many of our distributors are also wondering how a recession will impact inflation,” adds Wilson.

“There are no easy answers. Recessions and inflation are closely linked.  But the longer the recession lasts, the more likely inflation will begin to fall.”