LAST week’s shock news that the US lost its triple-A rating caused a huge drop in share prices worldwide. Coupled with the ongoing Eurozone crisis, this could seriously harm the fragile recovery.

There are already commentators predicting a double dip recession. This could have a severe impact on the average business or individual in the North East.

Whilst it is tempting to assume that what happens on Wall Street will not affect what happens on Northumberland Street, with the North East recovering more slowly than the rest of the UK, it could prove a fatal assumption. Technically the UK economy is out of recession but the feel-good factor does not appear to have filtered to the North East.

With the prospect of a double dip on the horizon, forewarned should be forearmed. Strictly speaking, businesses should be more prepared for what another global recession could bring.

However, a second round of recession could prove more deadly than the first. It would not just be a case of cutting costs and hoping for the best as most businesses have already cut back to the bare bones.

It would be wise to think now about what could happen to your business and what you could do to ensure survival or even grow should a double dip occur.

For example investors currently busily selling stocks and shares will need to think about somewhere to put their money. Given what is happening elsewhere, the UK and the US are in fact the most palatable options for investing in government bonds or currency. Ironically though, this could affect the strengthening of our economy and aims to play down the budget deficit.

It’s not all doom and gloom though for the North East. One area of potential is in the realm of manufacturing. If the commodities market does wobble, countries like China may reduce their raw materials imports. This in turn would reduce their manufacturing capacity, which may see opportunities for the region.

Property will be another interesting sector to watch. If house prices were to drop, there would be an argument to say that renting may be a safer move for individuals.

If that were the case, residential landlords might buy up surplus stock and create a new rental market, which in turn could stimulate the economy.

The key is to start thinking now about what you need to do to prepare for a potential second round in the bitter recessionary fight.

Neil Warwick is a partner at Dickinson Dees law firm and head of its specialist SME legal service – Kudos.