So, this is 2011. I must admit I was expecting it to be more spectacular. There should be fanfare. This is the final year of civilization after all. In 2012, the Aztec calendar runs out and the planet explodes, or implodes, or melts, or disintegrates or whatever it is that’s supposed to happen. That’s it. Game over. End of story. Catastrophic failure.
Shouldn’t we be roasting succulent pigs on spits and dancing like go go girls? Why aren’t we partying like Keith Richards in a coconut tree?
It’s because we’re scared. Bunch of frightened little mice, scurrying about worried that the world just might not end.
So we’d better be prepared for that. It’s always wise to have a contingency plan, just in case the world doesn’t end catastrophically.
But why bother anyway? The U.S. economy still is climbing its way out of the worst recessions in recorded history. We’re still understaffed, overworked and undecided on just what this new economy will look like. Will we ever start hiring again? Is prosperity more than a fleeting memory? That coconut tree is looking better by the minute.
As insane as this may sound, the economic news at the end of 2010 was better than anticipated. According to the Credit Managers’ Index (CMI), the past four to five months have seen steady gains in sales and new credit applications, sectors that usually herald improvement in business conditions. And there’s now momentum heading into 2011.[pullquote]
“Sales numbers have been rising in both manufacturing and service sectors, and that is promising for the coming quarter,” said Chris Kuehl, PhD, National Association of Credit Management (NACM) economic advisor and director of Armada Corporate Intelligence. “The improvement in new credit applications is more significant yet, given the impact it has on future growth. There is certainly reason for future optimism. More and more businesses are now anticipating expansion and are seeking credit in order to meet that expected demand.”
That is the good news. The not-so-good news is found in the index of unfavorable factors where there are trouble spots showing up. There were more rejections of credit applications, but some of that was expected with the overall increase in credit applications. The more troublesome aspect of these rejections indicates far more unqualified applicants than in the past. “This is the point in an economic recovery that provokes some desperation within the business community,” said Kuehl. “As key competitors start moving to capture more market share, their rivals have no choice but to try to keep pace, forcing companies to seek expansion regardless of whether they can really afford it.”
This very well could be the winter of our discontent. Good times may lie ahead, but they’re not quite here yet.
This is the period in the recovery when weak companies that have been hanging on will either find the business they need to thrive or let loose their grips and fall to the ground.
Hold on tightly. The fall from that coconut tree can be devastatingly painful. Just ask Keith Richards.