What is recession?
During a recession, the economy goes into a period of decline that lasts at least six months, two consecutive quarters, during this time economic indicators, which are statistics predicting future trends, have a negative growth. These include income, gross domestic product, employment, manufacturing, and retail sales.
Therefore, in terms of architecture, when recession hits the workload coming into a firm decreases and changes due to less new build project being started, since people don’t want to increase their liability in an unstable financial situation. This causes people in firms to be made redundant and salaries decreased. It also has caused the employment of architectural students to decline due to the lack of jobs available.
Where the UK is Heading?
Due to the Brexit crisis, the economic situation is at risk of declining and becoming a recession. It has been established that a recession could come from four factors:
Rise in interest rates – Companies are faced with higher borrowing costs
Collapsing asset prices – Leads to bank failure.
An external shock - The china and US trade war causing restrictions on our trading with those countries.
Trade protection - Restraints on our trading, causing an increased consumption of domestic goods, straining UK goods.
How Visual Rise could be affected?
Our initial aim is to approach larger companies who require virtual reality however as our company grows, we will aim to reach out to more domestic clients who are looking to create a new build. However, if our economy declines into recession then people will not be looking to start new build as they will be trying to protect their assets. A lot of business will be tightening their spending and we may struggle to push our virtual reality products as it is still seen as a luxury, and our clients may not be able to afford luxuries during a recession.
If this happens, we might need to aim to reach out to clients who require VR.
Tips to help during a recession
Be indispensable
Attain many skills not just one
Be flexible
Don’t just rely on one income of just clients
Edited by Annabel West
References
The Balance, 2019. 5 Warning Signs of a Recession. [Online] Available at: https://www.thebalance.com/what-is-a-recession-3306019 [Accessed 20 Nov. 2019].
Real Business, 2019. What will the next recession look like? [Online] Available at: https://realbusiness.co.uk/what-will-the-next-recession-look-like/ [Accessed 20 Nov. 2019].
Investopedia, 2019. How Do Recessions Impact Businesses? [Online] Available at: https://www.investopedia.com/articles/economics/08/recession-affecting-business.asp [Accessed 20 Nov. 2019].
Hubbard, B. 2019. 7 Tips To Survive The Next Architecture Recession. [Online] The Architect's Guide. Available at: https://www.thearchitectsguide.com/blog/architecture-recession-survival-tips [Accessed 20 Nov. 2019].
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