Actions vs words from business leaders eyeing a recession

I spotted an interesting piece in Axios, where they compare the difference between the talk of recession and actions before one.  Quoting the piece:

The nation’s biggest firms reported a record sum of capital expenditures (CAPEX) — investments in buildings, new machinery or technology.  Restrained investment on the part of businesses is one way in which the Federal Reserve’s aggressive interest rate hikes translate into slower economic activity.  So far, that impact is not as prominent as one might expect. In the third quarter, S&P 500 companies spent $222 billion on capital investments, according to S&P Dow Jones Indices. The firm calculated the figures from over 90% of firms that have reported corporate earnings so far. That means the final tally will almost certainly be higher.

The piece continues:

Corporate borrowing has slowed on the back of higher interest rates. Investment-grade bond issuance is at $75 billion so far this month, compared to this year’s peak of $231 billion in March, according to Pitchbook LCD.  This suggests that while companies continue to invest at a brisk pace, they might not be borrowing as much to do so. Rather, they are relying on booming profits built up in recent years.

And finally:

In surveys, CEO confidence has deteriorated, pointing to a softer outlook for hiring and business investment. But that mood hasn’t yet translated into substantially lower rates of employment. It also hasn’t yet resulted in big CAPEX pullbacks.

So let’s combine that with a data point from Kaspersky in their research.  Quoting them in ChannelE2E:

According to our MSP market focus in 2021 research, 81% of MSPs report an increase in their customer base compared to 2019. Among MSSPs, this figure is even higher — 91%. Canalys analysts note the same trend. According to their forecasts, the results of 2021 show continued growth of the MSP market — in Europe alone, they expect an increase in market volume from $79 billion in 2020 to $92 billion in 2021.

Actions speak louder than words, right?  Here’s the note: the mood differs from execution, and my advice has been caution not to pull back.   The smaller your organization, the less the concern is around borrowing and the more it will be about cost pressures, mainly due to inflation and labor.       The key consideration is to manage costs as the mood gets sour by ensuring the business is well situated around cash.     Then move forward.