Start Planning for Risks as Economy Sputters

Not all analysts are convinced that the economy has turned a corner.

For instance, consider the opinions of Michael Bechara, Managing Director of Granite Consulting Group Inc.

"2010 is likely to be another tumultuous year," he says. "In this hurricane of the Great Recession, we have recently been enjoying some calm as the eye of the storm passes above us, but by late 2010 we will enter the full fury of the other side."

Bechara advices that manufacturers, defense contractors and distributors should be on the lookout for five threats, in particular. His list includes:


Energy price volatility. Will oil continue its advance or collapse again?



Brittle credit markets. Bechara sees continued deterioration in residential and commercial real estate markets. As a result, banks will be faced with shrinking capital ratios and will likely tighten credit further.



Structural changes. Bechara also cautions that businesses need to confront the new rules of the "economic game. " You don't want to be caught with last year's playbook, now that new structures have been established.



Equity market pullback. Some experts are now warning of a pullback (or even another collapse) in the DOW.



Process degradation. Layoffs and restructuring have left many companies scrambling to increase productivity and effectiveness. Process and redesign are critical now.

How do you see it? Do you also think we are currently in the "eye of the storm," with more "fury" to come in the second half of 201o? If so, what threats are you preparing for now? And, have you discussed these risks with your critical suppliers, so that your risk management strategies are aligned?