An overwhelming majority of business leaders surveyed in a new Express Employment Professionals poll don’t expect a recession within the next six months, despite increased media focus on the possibility of an upcoming downturn.
In the survey, just 4% expect a recession in the next three months, while 14% expect one in three to six months. Nearly one-third (31%) predict a recession in six months to one year. More than one-third (36%) expect a recession in one year, and 41% say a recession is likely two years away.
Express Employment Professionals franchise owners warn that fear of a recession may actually be what triggers one.
“In a consumer-driven economy, recessions can be a self-fulfilling prophecy,” said Brian Baker, a franchise owner in Portland, Oregon. “If you expect a downturn, you stop spending and investing. When enough people stop spending, the economy suffers.”
Reid Bates, a franchise owner of Express offices in Olympia, Centralia, and Aberdeen, Washington, shares this concern.
“The worry is that talk of a recession will lead to a drop in consumer spending and business investment,” he said. “There is still a lot of gas in the U.S. economy. Employment is high, and wages are climbing. I fear the hype is going to squash consumer confidence.”
In Canada, Express franchisees also believe a recession is not likely in the short term.
“We are not seeing signs of recession in our area,” said Ted Maksimowski, an Express franchise owner of three offices in Ontario (Hamilton, Burlington, and Brantford). “Consumer demand and spending are high, there is a lot of capital in the market, corporate profits continue to be positive and many of the major markets in Canada are at or near full employment.”
Hanif Hemani, an Express franchise owner in Saskatoon, Saskatchewan, agrees that a recession is not likely in the near future. But both Hemani and Maksimowski warn that there is economic uncertainty in the longer term.
“Canada really is at the mercy of two large global ‘influencers’ in my opinion,” Hemani said. “What happens in the US and China will affect economic activity here. Trade wars and tariffs certainly depress economic activity. In Saskatchewan, this can affect everything from oil prices to agriculture. Exports, in particular, are affected and in other parts of the country, the manufacturing sector is impacted.”
In the U.S., John Dickey, an Express franchise owner in Wakefield, Massachusetts, says the ongoing tariff war is becoming a factor in his market.
“Tariffs are affecting our customers daily, and they are holding off on adding additional headcount in order to keep their costs as low as possible,” he said. “The job numbers also are decreasing every month. But the most noticeable sign is the manufacturing index that has dropped below 50.”
Jan Riggins, general manager of two Forth Worth, Texas, Express franchise locations, recognizes the trade concerns but predicts a strong economy.
“The tariff war with China is a new thing that we’ve never experienced before,” she said, “I think we are seeing the effects of it bleed a little through the economy. Overall, I think 2020 will be a good year.”
“The people we talk to don’t see a recession any time soon,” said Bill Stoller, CEO of Express. “There are some signs of an overall slowing of the economy-but a slowdown and a recession are two different things. Right now, the job market is strong. So, the most important thing is not to let our fears launch a recession.”