The long and short of it

Jan. 1, 2010
What if the recession that now appears to be ending is actually two recessions the low point in a relatively short (five- to seven-year) economic cycle on top of the low point in a much longer (30-year) cycle

What if the recession that now appears to be ending is actually two recessions — the low point in a relatively short (five- to seven-year) economic cycle on top of the low point in a much longer (30-year) cycle? According to Noël Perry, senior consultant and principal with Transport Fundamentals, that may be exactly the case. If it is, businesses also need to plan for both a shorter-term and a longer-term recovery period ahead.

“There is pretty good historical evidence that there are long cycles as well as short cycles in economics,” says Perry. “In other words, you can see 30-year economic cycles upon which five-year cycles are imposed. A long cycle begins with slow growth, then the growth accelerates up to the point of a major recession and then it all starts again, with more minor peaks and recessions in between. We are at the turning point of a long and a short cycle now, so we have to forecast the recovery for both.”

The low point of the last long economic cycle was in 1980-1982, according to Perry, when an energy crisis, inflation and the end of America's “rustbelt” economy brought the country to a major recession. This time, another energy crisis, huge over-borrowing and the rise of a gigantic new market competitor, China, triggered the fall.

“Fleets need to be aware of the fact that they may have a good six months to two years ahead [the short cycle], but it won't last,” he says. “That is not to say we won't have a nice recovery; we will, but then things will slow back down again [the long cycle]. On average, the outlook for the next ten years is for slower growth.”

About the Author

Wendy Leavitt

Wendy Leavitt joined Fleet Owner in 1998 after serving as editor-in-chief of Trucking Technology magazine for four years.

She began her career in the trucking industry at Kenworth Truck Company in Kirkland, WA where she spent 16 years—the first five years as safety and compliance manager in the engineering department and more than a decade as the company’s manager of advertising and public relations. She has also worked as a book editor, guided authors through the self-publishing process and operated her own marketing and public relations business.

Wendy has a Masters Degree in English and Art History from Western Washington University, where, as a graduate student, she also taught writing.  

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