Some media are reporting the recession is on its way out. That's great news, of course, but the tricky part is getting the recovery to start in earnest. Some experts believe it's going to be a long haul and could take the better part of 2010 before consumers really feel the effects.
A question on a lot of our minds is whether the recession has really changed our habits as consumers. Before the economy took a nose dive in 2008, it's evident that Americans had been spending way outside of their means. We had gotten greedy in our consumption of expensive homes, cars, electronics, vacations - you name it. To pay for all this, consumers became irresponsible with easy credit and the rest is, as they say, history.
Many Americans have lost their jobs or taken a pay cut in the past year. Still more remain working but have seen the handwriting on the wall and have taken steps to cut back in preparation for the possibility of losing all or part of their income. Out of necessity, this has resulted in a pervasive "back to basics" movement among consumers. People are delaying purchases, shopping sales, cutting coupons and saving more. But will it stick?
One could easily argue that it won't. Let's face it, we're still Americans and our culture - and our economy! - has been based on conspicuous consumption for a very long time. While it might not seem like it at the moment, the current recession is still rather short when compared to past downturns, such as the Great Depression, which shaped the fiscal philosophy of an entire generation. All things considered, it's easy to imagine that when the economy improves, our old habits will return, even if they are tempered somewhat with a bit more caution.
On the other hand, maybe consumers have been burned badly enough by past mistakes that there will be a long-lasting change in habits; a paradigm shift toward more conservative spending. Let's hope so, for the sake of future generations.
At the moment, however, we know that our economy needs stimulation and consumers play a crucial role in that movement. For those of us in the rental industry, we face a tremendous opportunity, if we choose to capitalize on it. For if consumers truly do turn over a new leaf and remain frugal, what better way to do that than by renting equipment when it's needed versus buying something that's only needed occasionally? The concept of rental has been gaining momentum for decades, but the potential it currently packs is unprecedented.
No one knows for sure what's next for our economy, but I think it's safe to say that it's going to improve, it's just a matter of when. When it does, let's hope we handle it correctly to realize a stable and long-lasting recovery.
