The news that South Africa has slipped into a recession was confirmed with the release of the GDP figures from Stats SA on the 6th of June 2017. But what does that mean for you and your business?
What is a recession?
The generally accepted definition for a recession is when an economy experiences at least two consecutive quarters of negative growth in its GDP. South Africa’s GDP had a negative growth of 0.3% in the last quarter of 2016, followed by a decrease of 0.7% in the first quarter of 2017.
Source : www.statssa.gov.za
What does it mean for your business?
Negative growth is usually an indicator of lower consumer expenditure, meaning that customers are spending less. Less spending by consumers means that companies need to rethink their sales and marketing strategies. The needs of consumers will change during a recession, and companies have to adapt to survive.
Companies will also need to look at operating more efficiently, cutting costs where possible. The benefit is that your company will be better equipped when there is an upturn in the economy.
Tinyeleti Consulting offers business advisory services to companies looking to operate more efficiently, including supply chain optimisation, financial modelling and feasibility studies. Contact us at 011 568 2371, or send us an email at firstname.lastname@example.org.