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Thread: Consumer Confidence Low?
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14th May 2019, 04:02 PM #16Senior Member
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I assume now would not be the optimal time to start a small woodworking based business
Up my way the people I see selling things are, once everythings added up, working for somewhere between $0 & $5 per hour $10 if you're lucky.
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14th May 2019, 04:06 PM #17GOLD MEMBER
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I suspect that the proportion of people who have all they could ever want is very small indeed. Particularly in our modern consumerist world where we are conditioned to believe that happiness is derived from things rather than experiences or relationships - despite significant research to the contrary. Most are on board the hedonic treadmill of consumerism and won't stop spending by choice. There would only be the fortunate few that are content with what they have - and they are likely to have some years of life experience behind them I suspect.
Cheers, Dom
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14th May 2019, 04:44 PM #18GOLD MEMBER
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The business i work for had its worst April in 20 years. We believe from what our customers are saying that by the end of May into June it will pick up again. There re plenty of large projects out there that we are tendering, its just the combination of EOFY and the election that has spooked the market.
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14th May 2019, 04:45 PM #19GOLD MEMBER
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...have others noticed a pull-back in spending / confidence in yourselves or others? ... but general economic talk is also always interesting.
Yes, I certainly have noticed not only a drop in consumer confidence but also a drop in our personal resilience and incomes (translates to disposable income), a drop in house values in major cities (which erodes an impression of stability), and a drop in the quality of political debate when we look for some leadership and hope through believable and achievable policies. The Royal Commissions have also exposed so much illegal practices which begs for correction which costs money and requires commitment from government. I feel for small business trying to survive in these circumstances too. Perhaps its the political focus in weeks leading up to an election that helps focus our media and our minds.
Internationally, these are very troubling times with Brexit, mass Immigration, various old Wars still in progress incl. that on terrorism, wars on diversity and religious values, Trade Wars, Political & Financial Influence by countries expanding their 'zones of influence' through power in our region, Envoironmental damage and species loss, Climate change and water shortages, droughts and floods and fires catastrophies are also in our face almost daily … it goes on and on and just seems to get worse. Hard to keep contained it personally I find. I am hoping that nationally some change for the better will happen soon.
Like you I have a sense of foreboding .. like "something has to break" .. maybe a war or some international drastic collapse of some sort - economic, social or environmental. Before you start, look at how and where you sell your product to, even through entry costs may be lower now, sales may still be difficult.
Everyone is looking for a SAFE HAVEN (its not in banks savings, bonds, shares or even property) … so mine is in my shed and wood
Cheers Euge
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14th May 2019, 04:48 PM #20GOLD MEMBER
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14th May 2019, 04:58 PM #21GOLD MEMBER
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Hi Euge,
Your post (maybe too big to quote) reflects a lot of my feelings/thoughts as well - it seems to be hard to find much to be positive about looking forward. I am also fearful a war is a likely outcome to deflect responsibility / focus from the financial troubles the world is in. The USA has an estimated $220 trillion of unfunded liabilities for example (and growing!)- where is that going to come from? The China vs US "trade war" is concerning, and not from a financial perspective, but rather where that conflict eventually leads.
Cheers, Dom
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14th May 2019, 05:22 PM #22
Confidence is a curious thing. I once heard it described as the false sense of well being you experience immediately before you completely understand the situation.
The economic world is based an a continuous roundabout of spending and the expectation that everybody can pay for what they have bought. Unlike most of our purchases on a domestic level, other than houses and cars, we tend to pay up in full, but this is not the way of the greater economic world. Most of the world is in huge debt: A debt that if it were called in would see the worldwide economic collapse. Of late there have been a number of shudders or looming shudders among the major players. Inevitably it sends ripples down to the minor players such as Australia, which half the world does not know exists including an ex American president who thought it was located somewhere South of Germany.
The market is wary, possibly with good cause.
Once upon a time I knew a man who could pick a recession six months or more ahead of the official announcement. He used to look across the red dust bitten landscape of the BHP in Newcastle and watch the coils of wire start to stack up at AWI (Australian Wire Industries). He explained that with Australia's agricultural exports playing such a big part of the economy AWI was a big indicator as to how things were tracking. When times were tough on the land the farmers stopped buying material to repair and maintain their fences.
Of course today BHP does not exist in Newcastle anymore having shut up shop in 1997, but AWI is still there. Neither are agricultural exports quite such a big part of our economy. All the same, I wonder how AWI are going right now. I suspect that the minerals sector too is little jittery as it transitions from saviour to pariah.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
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14th May 2019, 05:56 PM #23.
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This is an interesting 2018 export list
- Mineral fuels including oil: US$87.7 billion (34.6% of total exports)
- Ores, slag, ash: $59.7 billion (23.5%)
- Gems, precious metals: $16.1 billion (6.3%)
- Meat: $10.2 billion (4%)
- Inorganic chemicals: $8.2 billion (3.2%)
- Cereals: $4.9 billion (1.9%)
- Machinery including computers: $4.8 billion (1.9%)
- Aluminum: $3.8 billion (1.5%)
- Electrical machinery, equipment: $3.2 billion (1.3%)
- Optical, technical, medical apparatus: $3.2 billion (1.3%)
Missing from the list is $32 billion brought into Australia by international students.
The income from exporting other services and incoming tourist also adds about another $50 billion.
While the services export sector is growing, until services exports overtakes stuff coming out of holes in the ground, export wise we are basically a third world country and subject to the whims and vagaries of other countries need for such basic commodities.
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14th May 2019, 06:57 PM #24GOLD MEMBER
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You make some good and interesting points Paul. That comment about Australia being unnoticed is so true. When I was in the US a few decades and talking to person she expressed amazement.... THAT WE SPEAK WITH AN ENGLISH ACCENT IN AUSTRIA!!! I nearly fell over.. But what you say is so true... and as Bob says... in many ways we a almost unknown and more like a THIRD WORLD country ....primarily a a commodity exporter. Back to the beginning. And after all that talk of INNOVATION and a SMART COUNTRY etc ... its means almost nothing. We have always been very inventive out of need or other reason. But risk taking and benefiting from it economically as a nation is sadly not as widespread as it could be.
When trying to commercialise University (and other private) research/ ideas I found there was much resistance to risk taking. What investors wanted was short term returns at minimal investment. But "having a go" means putting money down, know when 'to hold em and when to fold em'. The Govt of the day gave generous 150% tax breaks but still commercialisation from Unis and from CSIRO remains an uphill battle. Selling places to overseas then gained greater appeal and has been growing since.
Euge (Eugene)
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14th May 2019, 07:30 PM #25
Lately I've noticed that prices for woodworking tools in the second hand market have stalled and in some cases (antique saws) I perceive a downward trend. About a year after the last major market downturn here I was able to scoop up quite a few higher end woodworking tools for what seemed like bargain prices. The effect this time isn't nearly as strong as last but I think things are going to turn downward.
In the US there has been much crowing by the politico's about the low unemployment rates currently but we also have a low labor participation rate. In the US the most commonly cited unemployment statistic derives from the number of people actively drawing unemployment benefits. These benefits are actually quite short term and increasingly difficult to qualify for. Thus there is a significant number of people without jobs who aren't counted as unemployed.
Found this interesting site the other day. Regions | U.S. Cluster MappingInnovations are those useful things that, by dint of chance, manage to survive the stupidity and destructive tendencies inherent in human nature.
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14th May 2019, 08:03 PM #26
Rob
I am glad you mentioned about the handtools as it was my impression too, but I did not want to be accused of turning a debate on the economy into a discussion of one of my favourite subjects! Thus creating a digression. Tools, particularly old tools, have to be considered a "luxury" pastime so when that industry slows it has to be at least one indicator of a troubled economy.
That inter active link is most interesting. I think it points to a levelling off and bearing in mind the stats are only up to 2016 so a slide may have continued although the data is not yet available. Is the orange man responsible? I feel sure I heard him say he had turned the economy around. There again, our politicians make similar unsubstantiated claims. The ugly fact is that whatever happens your side of the pond will have an effect on our side too. Just this evening I heard talk about the dilemma of faithfulness with your best mate and allegiance with your best business customer.
The most disturbing aspect is the question of who in the world is in a strong position. Nobody stands close scrutiny as far as I can see.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
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14th May 2019, 08:23 PM #27
In the US the words 'smart' and 'innovation' are most often used in reference to Internet related stuff. San Antonio has a variety of municipally supported efforts that all pay lip service to smart and innovative efforts but all are directed toward electronica.
Most of the investment money in the US spins on Wall Street or in real estate. Everything else is considered too risky by most of those I've encountered who call themselves investors. I've been told that manufacturing and pharmaceuticals investments are considered to be among the most risky. Pharma I understand, but manufacturing?
We have the Research Tax Credit, which if I'm not mistaken was made a permanent part of the tax code recently. Formerly it was renewed year to year. Thus, if an investor puts $10 into a research based investment that money can be deducted from the amount of tax owed. The RTC essentially pays the investor back via reducing taxes but despite that lure it is very hard to find anyone who's willing to listen to such proposals. Much easier for the plutocrat class to make money in other ways.Innovations are those useful things that, by dint of chance, manage to survive the stupidity and destructive tendencies inherent in human nature.
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14th May 2019, 08:57 PM #28
Interesting site for economics data and graphics.
https://tradingeconomics.com/australia/employment-rate
https://tradingeconomics.com/austral...ess-confidence
https://tradingeconomics.com/united-...ess-confidence
Innovations are those useful things that, by dint of chance, manage to survive the stupidity and destructive tendencies inherent in human nature.
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15th May 2019, 12:19 AM #29
Hi Rob
there's one important difference between Australia and the US -- Australia doesn't have "jingle mail".
What this means is that if the bank forecloses on a property -- and in Australia something like 90+% of all borrowing is through a major bank -- the borrower remains on the hook for the difference between what the property realises when sold and what has been lent to purchase the property. And "mortgage insurance" only protects the lender, not the borrower.
Interestingly, both sides of the political spectrum have just promised to "guarantee" 15% of the purchase price for new home buyers.regards from Alberta, Canada
ian
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15th May 2019, 01:10 PM #30
Well getting back to the origional question then this might be another data point.
I live in a well off low crime old area. Most of my neighbours have been here longer than me (22 years). Each year at this time we have the council garbage exchange. In the last couple of years I have been absolutely astounded at what I picked up off the curb. This year there was about 1/10th the amount and much less of anything worth taking. The professional scavengers were loading rusty steel into their trucks because there was just nothing else. One of these filth came into my yard and stole an air conditioner.
I cannot believe my neighbours have run out of stuff to chuck. Instead I think they have cut spending and are holding on to things more. maybe even hitting gumtree to try and get some $.
I think the election is the excuse. Just like black Friday was the excuse last Christmas. I really think the credit cards are maxed out, the music has stopped and there are no chairs left...
Ian, good point on default liability. Really important difference between USA and Aus.I'm just a startled bunny in the headlights of life. L.J. Young.
We live in a free country. We have freedom of choice. You can choose to agree with me, or you can choose to be wrong.
Wait! No one told you your government was a sitcom?
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