Crystal ball gazing
Interesting isn’t it, talk of a looming recession when the reality for local businesses right now is that we are leaving so much unmet demand on the table. A bitter pill for many businesses to swallow after years of waiting for demand to return. Forget about the prospect of people losing jobs; we have far more jobs than people willing (and able) to work in them.
Is our inability to meet demand and eroding margins of more concern than a ‘recession’? Maybe.
Construction is busy, and summer visitation is on par with pre-Covid. China has opened up, and we will soon see more pent-up demand here – great for our visitor economy. By all accounts, it seems we are back to business after those stormy Covid years.
Queenstown Business Chamber recently hosted Reserve Bank Economist Paul Conway to share his forecast for the year ahead as part of our Westpac Smarts series. Paul spoke about NZ being a bit of an ‘outlier’ given demand in our economy has remained resilient. Does that make Queenstown an outlier of an outlier?! He also spoke about forecast growth in unemployment and the fact that higher interest rates are needed to meet our inflation and employment objectives. “Forced change in uniquely challenging times”.
I’ve seen media reports advising businesses to ensure they are recession ready by having a buffer in their business. I wonder if that is the same ‘buffer’ you used to survive the pandemic?
Interestingly in the last quarterly Chamber Business confidence survey, a net 20% of local businesses felt confident in their economic outlook, while a net 33% expected conditions in NZ to deteriorate. Maybe that’s because we feel like we have already been through ‘our’ recession. The biggest factor cited as a constraint to growth is the inability to find staff.
This year may be challenging, but we’ve endured and survived a pandemic. A recession is another blip we can take in our stride.
Onto solutions, and where the QT Business Chamber can help. Invest in your people – hold onto them tight. There isn’t a massive influx of labour (with secured accommodation) coming anytime soon to save the day. Adapt to operate with a leaner workforce, adopt tech to streamline where possible, work with other businesses to share some costs or perhaps coordinate opening days for efficiencies? The Queenstown Business Chamber will focus on events and training to help you in this space, with a focus on your people and bottom line to get through this year. This is the time to invest in your business running like a well-oiled machine. All this work on your business will pay big dividends in the long run—recession or not.
On a positive note: another key takeaway I took from Paul’s presentation is that things could be a lot worse, but 2024 is looking much better.
