When we look at economic, industrial, or business trends, we need to understand whether they are secular trends or cyclical trends.
For instance, our population growth is on a declining trend. A few decades ago, population growth was above 2.0% and now it is 1.0%. There is a clear downward trend and this trend is likely to continue for at least a few more decades due to declining fertility rate, rising cost of living, growing urbanization, etc. It's a natural course of the economy. The declining trend in population growth is there for decades and looking at other indicators, it is safe to say the trend is likely to continue for at least a few more decades. It's a secular trend - a trend that sustains for a long period with greater predictability.
Now, think about the current upward trend in the interest rate. Was the trend the same 5 or 10 years back? No. It moves in cycles. In some periods, there was a downward trend, and then there was an upward trend. It is not likely to go up forever or go down forever. It's part of a cyclical trend.
It's important to separate the trends that are secular and cyclical. We can sometimes mistake cyclical trends for secular or vice versa. For instance, if we see a business going through declining sales after a growth period, we may assume that it's cyclical. However, it may be due to a secular trend. The business's competitiveness may start deteriorating due to changes in technology that the business is unable to cope with. It may continue to lose market share to new fast-moving competitors. The declining trend in sales may not be cyclical, but rather secular.
On the other hand, market participants can misinterpret a cyclical trend as secular trend as well where a business may face short term headwind due to macro factors which is recoverable once the cycle changes. It's important to understand the underlying reasons to figure out if the changes are secular or cyclical.