The four-phase business cycle is fundamental to ITR Economics’ methodology. Each of the phases − Phase A, Recovery; Phase B, Accelerating Growth; Phase C, Slowing Growth; and Phase D, Recession – represent the performance of your business, industry, or markets.
Our team of business-minded economists provide actionable advice for each business cycle phase. Known as Management Objectives™, these insights will help your company make the right decisions at the right time.
Phase A, Recovery
In Phase A, Recovery, business activity is below the year-ago level. However, the 12/12 rate-of-change is rising below the zero line, indicating the early stages of recovery. This is the first positive phase of the business cycle.
Phase B, Accelerating Growth
In Phase B, Accelerating Growth, business activity is above year-ago levels. This is the best phase of the business cycle to be in; the 12/12 rate-of-change is both above the zero line and rising.
Phase C, Slowing Growth
In Phase C, Slowing Growth, business activity is still above year-ago levels. While you are still experiencing growth relative to the previous year, the rate of growth is slowing. The 12/12 rate-of-change, while still above the zero line, is declining. This is the first negative phase of the business cycle.
Phase D, Recession
In Phase D, Recession, business activity is below year-ago levels, and the rate of decline is increasing. The 12/12 rate-of-change has moved below the zero line and is negative. While this is the worst phase of the business cycle, it is still possible to remain profitable during Phase D and set your business up to capitalize on the next upswing.
