Why is it when the economy shrinks by 2%, orders drop by 50%? Because recession in the economy as a whole doesn't mean an equal, across the board, reduction in your activity or your costs. Some costs are fixed, so those that can be controlled, your discretionary spending, has to be cut by a disproportionate amount. If you're a supplier of these 'discretionary' items, your orders suffer accordingly. That's why, in the consumer market for example, a 2% slowdown in the economy has produced a 40+% fall in new car sales. At an individual level it's no big deal for Mr or Mrs Average to put off the luxury of buying a new car for a year or so.