The recession of 2008 is still fresh in the minds of many for a good reason. Significant numbers include: over 170,000 businesses went under, 2.6 million people lost their jobs and the stock market losses totaled $6.9 trillion. Financial experts are still sifting through the data from that time, leaving the full economic impact yet unknown. The nature of the economy is to ebb and flow, but these unsettling facts have prompted some to predict that another severe recession could come in 2020.
This may sound like a classic “the sky is falling” scenario, but smart business managers and company owners need to consider the potential of a recession in their state. In the study, analysts crunched data from a wide range of resources, including the Bureau of Labor Statistics, Bureau of Economic Analysis and the Federal Deposit Insurance Corporation.
How they measured the data
They evaluated the following factors regarding state governance, regulation and laws, as well as the spending and saving habits of those who live there. They based the final ranking on:
- The state’s surplus or emergency funds (15%)
- Economic strength and diversity (15%)
- Debt-to-income ratio (10%)
- Unemployment rate (10%)
- Median home value (10%)
- Exports per capita (10%)
- Export diversity (10%)
- Deposits per capita (7.5%)
- Average credit card debt (5%)
- State income tax rate (5%)
- 2008 recession performance (2.5%)
The top five are:
- West Virginia
Georgia comes in 9!
Georgia ranked 35th in 2017. Now the state and residents have turned it around to crack the top 10. Contributing factors to the rise include:
- Export per capita was a notable $3,861
- The fifth-lowest average for debt-to-income at 1.46, down from 1.66
- It has 10% of total spending available stabilizing funds, which ranks sixth
- Unemployment dropped from 4.8% in 2017 to 3.6% in 2019
- Per capita deposits rose from $22,000 to $24,000
- The state also diversified its exports portfolio
Big-picture issues impact all businesses
Business owners and managers are wise to consider these big-picture issues when mapping out future business strategies. At that time, legal guidance can often provide helpful insights into how these matters specifically impact the client.