How the recession can create opportunities & threats for businesses & industries.

A recession is a general slowdown in the economic activity over a period of time. Production is measured by employment, investment spending, capacity utilization; household incomes, business profits and inflation, all fall during recessions; while bankruptcies and the unemployment rate rise. Recessions are generally believed to be caused by a widespread drop in spending.

Impact of recessions
Unemployment - Research in Britain shows that low-skilled, low-educated workers and the young are most vulnerable to unemployment in a downturn.
Business - Productivity tends to fall in the early stages of a recession, and then rises again as weaker firms close.
Social effects – Living standards of people dependent on wages are more affected by recessions than those who rely on fixed incomes or welfare benefits. The loss of a job is known to have a negative impact on the stability of families, and individuals' health and well-being.

Effects on Primark (opportunities)
A recession makes life tough for many businesses, but the recession had the opposite effect on Primark.
Sales at the clothing chain, which sells fashion at bargain prices, rose 5% during the first 6 months of the recent recession as shoppers chased for cheap clothing ahead of worries about the chain's involvement in the exploitation of workers - It was let out that Primark hire immigrant workers for less than £3 an hour, which is lower than the minimum wage set for the UK. Despite this factor, customers were still thriving for the cheap but fashionable clothing range, boosting its sales and becoming one of the top high street brands succeeding in the recent recession.
Stores like BHS, Next and Matalan were increasingly finding themselves squeezed by the competition, by the slump in consumer confidence and by falling growth in clothing sales, where as Primark are benefiting greatly.

Effects on Land rover (Threats)
Land Rover were cutting shifts and extending holiday shutdowns in order to reduce stockpiles. Up to 600 jobs were set to go by the end of the year as part of the firm's voluntary redundancy scheme.
In Solihull, the home of Land Rover, the problems at the factory were rippling out into the wider economy. Because of this, other businesses were suffering.
The motorist
Land Rover were suffering because people (consumers) aren’t spending money but are saving it. Even people in need of new cars were holding onto their money in the current economic climate because a lot of them were worried about what the recession will mean to their finances.

The car dealer
With the sharp rise of fuel prices, and the onset of the credit crisis, had left car dealers with growing numbers of unsold vehicles. The reason for this being, people weren’t buying cars because even though they might be in work and earning good money they were afraid of losing their jobs and their confidence had gone. The used car market for expensive 4x4s had dried up because of the high cost of fuel, leading car dealers to be overstocked with used cars and consequently not selling new ones either. As a result, dealers were offering big discounts on their vehicles.
The Land Rover worker
To cut costs, the Solihull plant cut overtime payments, totally erased the night shift and was offering earlier finishing times to cut costs on wages. Workers lost from £80 a week from dropping night shifts. Workers are afraid that they won’t earn enough for their current finances, but are relieved to still be in a job.
The car components supplier
The downturn may force firms to introduce short-time working and cut jobs and will be concerns about the economy and the availability of finance.