MIL-OSI Submissions: Economics – Mentions of ‘Recession’ in company filings spike for the first time since Q2 2020, finds GlobalData

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Source: Global Data

The number of mentions of ‘Recession’ in company filings has shot up to just shy of 200 in Q2 2022, according to research by GlobalData—representing a 9x hike from Q1 2022. The leading data and analytics company notes that this spike has occurred alongside a 26% rise in mentions of ‘Inflation’, conversations about which have continued to increase since the start of the COVID-19 pandemic.

Ekta Chourasia, Business Fundamentals Analyst at GlobalData, comments: “Besides the huge uptick in Q1 2022, this is the most that ‘Recession’ has been discussed in the last six years. Concerns about inflation have been rising since Q2 2020, but the increased pressures surrounding the Russia-Ukraine conflict have had a great economic impact.

“The average sentiment of ‘Inflation’ declined 1% over Q1 2022. The discussions are not only just on inflationary issues but also on how companies are dealing with them. For example, firms are discussing offsetting wage inflation via hiring freezes.”

GlobalData’s latest report, ‘Company Filings Analytics Trends & Signals Q2 2022’, reveals that the Technology sector had the highest mentions of inflation in Q2 2022 at 488; followed by Banking & Payments, with 379; Construction, with 309; Oil & Gas with 292; Consumer, with 249; and Retail, with 190.

Chourasia continues: “Technology company NVIDIA has  been discussing a focus on budget for current employees. Meanwhile, Samsung Electronics discussed inflation in terms of supply chain issue, the impact of the COVID-19 pandemic on raw material prices, and the Russia-Ukraine conflict. Other big tech firms such as Meta and Alphabet declared hiring freezes in a bid to cut down their costs to combat inflation.”

In the Banking & Payments sector, Bank of America mentioned labor and wage pressures in its inflation discussions. However, there are companies that were optimistic, despite talking about inflation. For example, Visa noted that it expected no negative impacts to global payments volume due to inflation. Mastercard also mentioned that inflation would have no impact on its customer spending behaviour.

Consumer companies such as PepsiCo were discussing commodity inflation, with many planning consumer-centric plans to deal with inflationary pressures. Nestle also mentioned price increments amid an inflationary environment. Meanwhile, Walmart discussed double-digit food inflation with consumers facing pressures. Retail giant Amazon discussed implementing an inflation and fuel surcharge for shipments, while also mentioning wage inflation.

Reflecting on Amazon’s Q2 2022 results, Neil Saunders, Managing Director of Retail at GlobalData, comments: “As the economy and consumer sentiment is deteriorating Amazon will need to run very fast up a downward escalator. On the demand side, the main issue is a general and widespread slowdown in purchases of discretionary items. Given that the bulk of what Amazon sells online falls into this category, it is not surprising that sales have moderated. GlobalData’s data shows that across all online, impulse buying is down and consumers are being far more careful with their money. As the largest internet player, Amazon is more affected than most by this dynamic. In contrast, sales at Amazon’s physical stores—which are dominated by the food offers at Whole Foods and its Amazon branded grocery stores—are up by 12% over the prior year, largely thanks to inflation.

“There is very little that Amazon can do other than to ride out the current trough. The quarters ahead are softer ones, in terms of prior year comparatives, and, with the benefit of Prime Day and perhaps another event in the final quarter, Amazon has a chance to put out some better top line numbers.”

Notes

Quotes provided by Ekta Chourasia, Business Fundamentals Analyst at GlobalData https://u7061146.ct.sendgrid.net/ls/click?upn=TeZUXWpUv-2B6TCY38pVLo9sEgCrt2NDrNlsOyQwk6zeaRbBa0wibEj7-2BOOCDNxNgq8eEp_-2F-2F3YByjhMnr0xQpHVywY0BH884l0DoQeAtTHjHOB707rW0fdT-2BvjGgUBRBVRYA2v5MLZQoRMTg-2FlHfuKNY9BksgB0ANd72rujut-2FZmY8t4DO5WRk2b5ffEXZACHMI1J9piBBmqWde-2BlxoS18EPYaMWjpK8JGuxcMxrKVJZzCHuTee4sfJEA-2FB88-2B6wwK6S4XzXggFAtw-2FHiP7h2rs5RFGGXqAkhnAt6CA5ASBhUFfROX-2BjQUEvr9OPjKgK7T6bVPZPdq392EJeVJNlCPMeCx9FennqsPXOGnKrq7JJceTg-2F7thzQ4Bg8HcaAaNUkLe1yKTM-2FLK-2FJDhubCgEM8fcGCoQmmFkCOqioOKceQfSbvGY-3D

Information is based on GlobalData’s Company Filing Analytics platform.
GlobalData Company Filing Analytics Database provides near real-time analysis of quarterly & annual reports, earnings call transcripts, IPO filings, events presentations and ESG filing trends for publicly listed companies globally.

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