Fearing recession, 95% of businesses will cut budgets—is PR on the chopping block

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Many businesses around the world fear an oncoming recession as central banks ramp up interest rates in a bid to curb inflation. But as they look to protect themselves from the worst effects of a potential recession, it’s clear that many haven’t learned from the past and will likely cut sales and marketing budgets, according to new research from UK-based market research agency Sapio Research.

The firm’s latest International Business Barometer report, Wave 6: Preparing for a Recession?, shows that 95 percent of businesses around the globe are concerned about a potential recession. Those concerns, however, aren’t equally spread. In the US, 45 percent of businesses are highly concerned about a recession, compared with just 11 percent in Germany.

Just over a fifth of businesses (22 percent), meanwhile, are already being affected by the current economic uncertainty

Again, these effects aren’t equally spread. Japan and the US are faring worse, with 28 percent of businesses in those countries already feeling the pinch. Globally, the percentage of affected companies is expected to rise to 42 percent by the end of the year.

The research also shows, however, that the responses to any recession are likely to be as misguided as they’ve been in the past

“While many companies say that their top mitigation strategy will be ramping up sales and marketing activities, most are still likely to bite the hand that feeds them,” said Jane Hales, managing partner at Sapio Research, in a news release. “The highest proportion of potential redundancies are set to be made in crucial areas such as sales and communications.”

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