August 13, 2021. – According to Wikipedia, business cycles are intervals of expansion followed by recession in economic activity. Within the last 12 months, we have had expansion, that is for sure. Fortunately, there are no signs of recession, but for long-term business, less steep ups and downs would be appreciated.
Turns are happening fast. It feels like the world is on amphetamine, and everything is speeded up. Even business cycles. They used to take years, but the near history looks different. To memorise and simplify what has happened since August 2020, I drafted a 9-point list of how a plywood cycle proceeds.
- Buyers ask to advance deliveries.
- Buyers ask for more volume.
- Suppliers ask for more price.
- Buyers still ask for more volume.
- Suppliers still ask for more price.
- Buyers ask to postpone deliveries.
- Buyers order smaller volumes.
- Buyers pay a smaller price.
- Go back to the beginning of the list.
Please, don’t take it too seriously. Real business is much more complex and fun!