[Special Report: Pest Control During the Downturn] Lessons from Chicken Little

Chicken Little once said, “The sky is falling.” And while anyone who experienced the Great Depression might have thought so, we all know the moral of that story.

In fact, a wiser person once said, “What goes up must come down.” It’s only natural that an economic boom is followed by its opposite and corollary counterpart.

So while the current economic crisis may be the worst in recent memory, with some 21st Century challenges yet to be fully understood, history has proven that downturns are temporary, and they’ve always been followed by economic rebounds.

Yes, consumers from coast to coast are justifiably worried about this global financial crisis, the resulting effects on our economy and how long the recession will last. But consider the great lessons we’ve learned from economic hardships of the past.

For one, the pest control industry seems to exhibit a tougher shell than others when it comes to weathering economic storms, since many customers view their pest control as necessary to protect their most important investment — their home.

Even during the Great Depression, the pest control industry was able to hold its own and grow, as it was often viewed as an essential service industry that was critical to protecting structures as well as public health. Furthermore, rising unemployment, while far from ideal, has actually proved beneficial for the industry, providing a steady stream of high-quality employees, a perennial problem for PCOs.

PCT wanted to put the current economic downturn in historical perspective for our readers, so we did some research, tracking down data from four recent recessions, along with similar information from the Great Depression.

In fact, you may recall first-hand the four more recent down-cycles in our economy, if not the Great Depression itself. There was the oil crisis and stagflation of the early 70s, the related monetary tightening experienced in the early 80s, the industrial slowdown of the early 90s, and the economic setbacks suffered in the wake of 9/11.

The numbers illustrate we’ve weathered tough times before. For example, recent losses in the Dow Jones Industrial Average (DJIA), while significant and worrisome, seem comparable to those experienced during the 70s oil crisis, which were quickly restored and eventually outpaced.

There’s no question, the global financial crisis is cause for concern. But if you’re inclined to follow in the footsteps of Chicken Little, a look at the figures below might also remind you, there’s often a silver lining. Is the sky really falling? Take a look at the numbers here and decide for yourself.

Endnotes
1. highest unemployment figure in period was selected
2. figure is for November 2008
3. greatest loss or smallest gain in recessionary period was selected
4. represents seasonally adjusted annual rate of decrease from the second quarter of 2008 to the third
5. figure represents difference from November 2007 to November 2008
6. largest loss or gain in period was selected
7. represents percent lost from high point (monthly) to low point reached during recession, rounded
8. represents change from high point in October 2007 to low point in November 2008
9. represents percent change from annual high immediately prior to recession to low reached during period
10. represents percent change during period
11. represents lowest value reached in period

Lisa McKenna is a frequent contributor to PCT magazine.