A recession is a macroeconomic term that represents a significant and extended period of declining or stagnant economic performance in a region or country in the world. Investors, businesses, public entities and governments all track various indicators that can predict or signal the onset of a recession.
Recessions are a normal part of a business cycle. Indicators measuring manufacturing productivity or lending surveys can signal the occurrence of a recession. There are many different theories that seek to explain what causes recessions. Broadly, structural shifts in industries such as a sudden spike in the price of oil or a widespread inability by consumers to pay debts can cause a ripple of effects across an economy that inhibit its ability to continue to grow sustainably.