What to Expect in a Recession?

Episode 209: You might see a lot of news reports right now talking about how we’re heading towards a recession. In this episode, we discuss what to expect in a recession, and the three things you should do during a recession to come out of it stronger than ever.

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Chapters

• 3:13 What is a recession?
• 4:02 What to expect

Transcript

 Jamie Irvine: (00:01)
You're listening to The Heavy-Duty Parts Report. I'm your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keeps trucks and trailers on the road longer while lowering cost-per-mile.

Jamie Irvine: (00:15)
You might see a lot of news reports right now, talking about how we are headed into a recession. Recently, I posted a live video discussing what to expect in a recession. And in this episode, we're gonna replay that live video that I did. I break down what to expect. I break down the three things I recommend that you should do during a recession. I think that this is an important subject that we need to talk about right now. And I hope that you take some benefit from it. It helps you to be able to cope with the challenges of working in the trucking industry during a recession. So here is this live replay from the video that I did, where I talked about what to expect in a recession, hope you enjoy it. Hello, and welcome to a live video that I wanted to put on.

Jamie Irvine: (01:10)
Anybody who's followed me over the last couple years, you know that I did a lot of lives in 2021, but at the beginning of this year, we took a break. We've been focusing on the podcast, The Heavy-Duty Parts Report. We've got a new studio and we have been rolling out a new format on that show. A lot's been going on in my world behind the scenes, both at The Heavy-Duty Parts Report and with our consulting and media production company. We've got some exciting news to share with you about that coming up. I also wanted to just quickly let you know that I am now a radio talk show co-host on a brand new radio show called mind your trucking business, which is on TNCradio.live every Thursday. If you don't catch it on the radio, don't worry. We're gonna be taking some of the best clips from those radio shows.

Jamie Irvine: (02:05)
And we're gonna be publishing them on The Heavy-Duty Parts Report. Now, the Jamie Irvine live show has always been about selling heavy-duty parts in a digital world. We focused a lot on tips, tricks, tactics, how to leverage digital tools. If you're a heavy duty parts distributor, I'm getting back into, into doing live videos, because I think that there's some subjects that we need to cover that need to be covered at a specific time. And right now we're just coming to the end of Q2. And a lot of people are talking about whether or not there's going to be a recession. What qualifies as a recession is two quarters of negative GDP. I think it is back to back, right? So you have two quarters where things decline things shrink, and that is the textbook definition of a recession. And we had decline in Q1.

Jamie Irvine: (03:05)
If we have decline again in Q2, it's very likely that we will officially enter into what is called a recession. Now, for some of you, maybe you've never been through one before, you've only seen the collapse of the economy because of the pandemic. So you got to experience one of those but maybe this is the first time if you're new, you know, if you're just a couple years into your working career, maybe this is the first time you'll experience a recession. Myself, I've been working since 1998, I've gone through several recessions and several collapses and bear markets. And there's some trends that I've seen emerge over my career that I wanted to talk about and share with you. For example, when a recession starts, it's big news, right? And leading up to it, a lot of people know it's coming.

Jamie Irvine: (03:58)
So it's in the news. There's lots of stories about it. When it happens, there is an immediate reaction in the economic landscape and the economic climate does go through a shift. It's almost like you enter into a winter where everything freezes up. Now we work in the trucking industry. I've got my t-shirt on here from thankatrucker.org. And we work in the trucking industry, you know, specifically the parts industry. So what typically happens? Well, the trucking industry is like the canary in the coal mine. Often what happens in the trucking industry is a precursor to what happens in the economy at large. And it is important to note that oftentimes in the trucking industry, before the recession is over, before the collapse has, you know, the recovery has occurred, trucking industry starts to rebound first.

Jamie Irvine: (04:57)
So oftentimes we decline first and we're a little bit ahead of the curve of what's happening in the economy at large. And then oftentimes we also are recovering before other sectors and other industries do. So that's important to remember. That's one thing, another thing is these kinds of contractions. They create like an economic winter where everything freezes up. And it's been my experience that in recessions, in the early parts of the recession, everything does tend to kind of slow down contract things. Don't move as much. Maybe you'll see a drop in sales. But what my experience has been, especially selling heavy-duty parts is that, that doesn't last for very long because the trucks keep need to keep rolling right there. Even in a recession, you still need food, you need energy. You know, you need all of the fundamentals of life.

Jamie Irvine: (05:51)
And then it's not that people stop spending all together that oftentimes they just back off on their spending a little bit. So while retail may go down a little bit, or maybe even a lot, the trucks still have to go. So if you're in the parts industry, you may see some shrinkage because there may be some trucking fleets that were on the edge financially. And this is just one step too far for them. And they go under, so you lose some customers. But what normally happens is after a period of time that that frees up, it starts to thaw and it starts to move because companies, they will they'll lay off. Some people, they will adjust their expenses accordingly and they'll bring things in lime where they are able to continue on. And I'm talking about companies in the trucking industry, your customers, people you're selling to.

Jamie Irvine: (06:43)
And so then all of a sudden things kind of bottom out and it gets as low as it's gonna get. And this is long before things bottom out in other sectors. That's what I mean by the trucking industry, being like a precursor. And then what happens is, is that people will go for a period of time kind of at the bottom like that, where they're controlling spending, they're being careful and then they realize that they need to make some moves to get going again and to grow. And so then you start to see companies in the trucking industry start to, uh, make different moves. They maybe even begin to start investing so that they can capitalize on the inevitable growth that will come after a recession or after this, you know, collapse where you have a bear market. Like we just had with the pandemic, or we had back in 2008/09 with the housing crisis.

Jamie Irvine: (07:37)
So then things start to happen and, and then things start to move forward. And we start that haw that starts to occur where the economic winter starts to thaw and we enter into spring and the cycle starts all over again. We're gonna take a quick break. We'll be right back. Don't have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket. So some key takeaways from my experiences through downturns and recessions are as follows one don't panic and don't overreact to media reports.

Jamie Irvine: (08:35)
They are often sensationalized and often even if it's bad, it's not as bad as it might feel. Two, when things decline, that is the time to really seriously evaluate, evaluate your expenses, evaluate your staff, evaluate your equipment and infrastructure and your inventory levels and everything about your business. That's the time to look at it all because when times are good and booming, we often become inefficient in certain areas. So focusing on areas to become more efficient during a downward period like in a recession or a bear market is very, very important. Then I think the third step, which is very difficult for some but is absolutely essential, is to be bold because the things that you do during a recession or during a bear market often set you up for how successful you will be coming out of that decline, out of that recession coming out of that bear market, depending on the situation and the amount of time and effort you invest during the economic winter will by and large dictate how much success you will have in spring and the future summer and the future harvest when the cycle goes all the way around again. So many of my colleagues have started their businesses during economic downturns, recessions, bear markets, difficult times. I myself have started two businesses during really significantly tough economic times. I started a contracting business that worked in the commercial and residential housing industry in 2009 when the housing industry was in absolute chaos, but a window of opportunity opened up and I capitalized on it. I rode that wave all the way through right, coming out of economic winter into spring summer, and right at the peak of, of the harvest I sold the business in 2016 to keep that analogy going. I also started The Heavy-Duty Parts Report just before the pandemic. And I started my consulting company three months before the pandemic shut down the whole world in March of 2020. Now at the time, the timing seemed to maybe be terrible timing for me, but it actually turned out very, very well.

Jamie Irvine: (11:00)
We spent a lot of time during the first lockdown building the infrastructure of the company and coming outta that first lockdown, we went on a run of converting consulting clients like I had never seen before. I had never acquired so many clients in such a short period of time in my entire career. It was truly amazing. Additionally, we stuck to the plan with The Heavy-Duty Parts Report. We kept publishing content. We kept doing interviews. We never ever stopped. And when we came out of those first couple lockdowns, we were stronger than ever. And now we've been running the show for over three years, over 200 episodes and we continue to add our voice to the trucking industry and make a meaningful and positive impact on the industry, which has had economic benefits for our company. So I highly encourage you, you know, just remember when, if and when a recession happens, if and when the next bear market occurs, those two aren't always the same, but when those kinds of downward trends happen in the economy, don't panic, don't overreact take time to improve efficiency and then be bold and start to plan for the future of when that economic winter starts to thaw and be ready, put the infrastructure in place during the economic winter, so that when things start to open up again, you can capitalize and be ahead of your competition. Thank you so much for watching this live. And we're gonna rebroadcast this on The Heavy- Duty Parts Report. So if you missed the live no big deal, you'll still be able to hear this. I think it's an important subject we needed to talk about and stay tuned. Follow me on LinkedIn and follow The Heavy-Duty Parts Report for free at heavydutypartsreport.com. There's going to be a lot of new content coming, some new styles of content, whether it's the lives that we're gonna start doing again like this one or it's the radio show that we're a part of, or it's our regularly scheduled interviews with heavy duty parts manufacturers and industry experts. The Heavy-Duty Parts Report is the place where you're gonna get amazing content and a lot of great information from some of the best people in the industry to help you with your business, regardless of whether you're a fleet maintenance manager, running a fleet, a repair technician, a parts technician. If you are in the business of keeping trucks and trailers on the road, The Heavy-Duty Parts Report is for you. All right, take care. Have a great day. We'll talk soon. Bye.