A new US survey of professionals occupying a range of procurement jobs in different industries reveals that a majority, 55%, expect a recession before the end of 2020.
The study, Plans & Tactics to Recession-Proof the Enterprise: Survey of Procurement & Finance Professionals, by AI-powered enterprise financial insights group, Suplari, also revealed that a worrying 30% of respondents say they are unprepared to manage a probable recession.
In the event of a downturn, practitioners in procurement and supply chain jobs would make travel a top priority for scrutiny, followed by facilities, office supplies, and marketing. To control costs, respondents would prioritise vendor consolidation and contract renegotiation as their principal tactics.
Suplari CEO and Co-founder, Nikesh Parekh, noted that purchasing professionals, whether permanent employees or procurement interims, tend to work closely and holistically with finance colleagues over matters such as savings optimisation, spend management, purchasing activity and the identification of risk factors. He added: “They are likely to be the first in their organizations to perceive and deal with the impact of a recession. We’ve conducted this study to give them practical and proactive insights about plans and tactics, beyond the usual macro-economic commentary about recessions in the economy.”
The report also provides procurement and finance professionals with a series of practical measures to manage a possible recession, including:
- Strategies for avoiding the disruption of profitability, growth, and performance
- Methods for rapid reduction of costs and risk
- Industry-specific tactics for dealing with a recession
- Budgets and categories that should come under the closest scrutiny
The report follows recent concerns shared by a growing number of analysts that the US economy is reaching the peak of an extended period of expansion, which began a decade ago, triggering speculation that a downturn or even a recession is now an increased risk. In an economy as gigantic as the United States, this has implications for other national economies, including Britain’s. British procurement pros may do well to read the report and prepare.