Discussion
, banking isn't doing much better - so both of the real wealth generators are down. I think that the economy is being propped up by shopping, which isn't really a good long term strategy.My field's been hit pretty badly for a while now - (some might say thats a good thing as its management consultancy but thats another thread)..
There is an interesting relationship between people talking about recession and recession actrually happening. My theory is that if enough people start talking about it, soon people start behaving as if its happening and then it does. Obviously, thats a bit of a simple process, but I reckon there is something to it..
Hopefully the house prices won't slump and inflation won't soar as I for one will be up
creek without a paddle..
There is an interesting relationship between people talking about recession and recession actrually happening. My theory is that if enough people start talking about it, soon people start behaving as if its happening and then it does. Obviously, thats a bit of a simple process, but I reckon there is something to it..
Hopefully the house prices won't slump and inflation won't soar as I for one will be up
creek without a paddle..Official definition of recession is something like "two full quarters of negative growth in GDP" - I think. Or at the least it is something very similar. To be honest I dont think that we are either in or are close to a recession - forecasts for 2003 on growth in the economy indicate something like 1.7 to 2 percent. Which is actually quite good in comparison to places like Japan that had a 7% recession a couple of years ago....
Its a difficult one though. In some sectors (manufacturing) it has been in decline for some time. But in others it is booming. It all has a lot to do with keeping the overall growth up - something that we might not have control over - war in Iraq, US economy and further financial scandals may be enough to tip us over the edge.... If that were the case then we would all feel it. At the moment there are sectors that are feeling it, but if I am honest I am not - more work that we can cope with...... its just some sectors I am afraid...
Cheers,
Paul
Its a difficult one though. In some sectors (manufacturing) it has been in decline for some time. But in others it is booming. It all has a lot to do with keeping the overall growth up - something that we might not have control over - war in Iraq, US economy and further financial scandals may be enough to tip us over the edge.... If that were the case then we would all feel it. At the moment there are sectors that are feeling it, but if I am honest I am not - more work that we can cope with...... its just some sectors I am afraid...
Cheers,
Paul
now, funny this one should come up. I came home the night before last and took a look at my house and felt real comfortable, why? I hear you scream.
About 10 years in the last boom we bought a house. Then the interest rates when airborne and it cost us apacket to live there. After a while we grew out of the house and the neighbourhood was getting a bit rough so we decided to sell. We just about broke even after nigh on 10 year investment. We then moved into a flash detached house which was lovely. I was very twitchy though about the repayments and worried about interest rates (I wouldnt have been able to manage if they had gone stupid again) so we sold the house and bought our present house which is atraditional 1940's bay fronted semi with a nice big garage. Its just about big enough, easily affordable and in a nice area.
So the reason i've just told you all this is... I feel really comfortable because I do believe that there is arecession on its way and its allready started, if it all goes Pete Tong we wont end up homeless and are presently very happy.
WOW THATS THE LONGEST IVE EVER TYPED FOR
About 10 years in the last boom we bought a house. Then the interest rates when airborne and it cost us apacket to live there. After a while we grew out of the house and the neighbourhood was getting a bit rough so we decided to sell. We just about broke even after nigh on 10 year investment. We then moved into a flash detached house which was lovely. I was very twitchy though about the repayments and worried about interest rates (I wouldnt have been able to manage if they had gone stupid again) so we sold the house and bought our present house which is atraditional 1940's bay fronted semi with a nice big garage. Its just about big enough, easily affordable and in a nice area.
So the reason i've just told you all this is... I feel really comfortable because I do believe that there is arecession on its way and its allready started, if it all goes Pete Tong we wont end up homeless and are presently very happy.
WOW THATS THE LONGEST IVE EVER TYPED FOR
pbrettle said: Official definition of recession is something like "two full quarters of negative growth in GDP" - I think. Or at the least it is something very similar. To be honest I dont think that we are either in or are close to a recession - forecasts for 2003 on growth in the economy indicate something like 1.7 to 2 percent. Which is actually quite good in comparison to places like Japan that had a 7% recession a couple of years ago....
Its a difficult one though. In some sectors (manufacturing) it has been in decline for some time. But in others it is booming. It all has a lot to do with keeping the overall growth up - something that we might not have control over - war in Iraq, US economy and further financial scandals may be enough to tip us over the edge.... If that were the case then we would all feel it. At the moment there are sectors that are feeling it, but if I am honest I am not - more work that we can cope with...... its just some sectors I am afraid...
Cheers,
Paul
Paul, what sector are you in, as has been said manufacturing and IT has been suffering for years and now finance is looking unsteady
I'm expecting something bad to happen quite soon. Probably it will take the form of some large business going bankrupt. The business will probably be in the financial services area. One of these firms that sells 'products' where in fact what they sell is promises. When that happens the knock on effects will be widespread and dramatic.
The reason why, simple, as a country we can't keep paying ourselves money we haven't earned. The wealth generating companies have been 'accounting for profit' for years. They have to, their shares are mostly owned by investment companies who insist on these wealth generating companies showing a profit every year (this is why they allow the companys' top brass to pay themselves so much). Can't last forever, can it? and when the 'black whenever' finally comes the previous slumps will seem trivial
John
The reason why, simple, as a country we can't keep paying ourselves money we haven't earned. The wealth generating companies have been 'accounting for profit' for years. They have to, their shares are mostly owned by investment companies who insist on these wealth generating companies showing a profit every year (this is why they allow the companys' top brass to pay themselves so much). Can't last forever, can it? and when the 'black whenever' finally comes the previous slumps will seem trivial
John
I would expect declining employment and increasing unemployment to be an early signal that the country is headed into recession.
According to recent propaganda "Employment continues to be at near record levels while unemployment remains broadly flat".
But this is actually inconsistent with what I am hearing from discussions I have with quite a wide circle of business and personal contacts in and around London. I am hearing increasingly of people being made redundant and/or fearing an impending night of the long knives because top line of the business is weak/fragile and management is looking to cost cutting as a short term expedient to hit earnings targets.
Should I be concerned about manipulation of the employment statistics
Hutch
According to recent propaganda "Employment continues to be at near record levels while unemployment remains broadly flat".
But this is actually inconsistent with what I am hearing from discussions I have with quite a wide circle of business and personal contacts in and around London. I am hearing increasingly of people being made redundant and/or fearing an impending night of the long knives because top line of the business is weak/fragile and management is looking to cost cutting as a short term expedient to hit earnings targets.
Should I be concerned about manipulation of the employment statistics
Hutch
I would agree.
Personal experience from almost everyone I know suggests that we are in the depths of a recession, yet the figures show growth.
Most professionals I know have been eiher made redundant, are under threat of redundancy or are wondering where the next contracts are going to come from.
I can't reconcile that.
Personal experience from almost everyone I know suggests that we are in the depths of a recession, yet the figures show growth.
Most professionals I know have been eiher made redundant, are under threat of redundancy or are wondering where the next contracts are going to come from.
I can't reconcile that.
Having moved out of traditional white collar office style employment into black-collar-pistonheads-shirt employment, it's opened my eye to different aspects of business.
My previous experiences were very much involved in the IT sector, banking, software houses, consultancy, finance etc.
These days, where I have a lot of contact with blue collar style businesses, it's interesting to see the different views. There are a lot of thriving businesses outside of traditional corporate life and manufacturing.
I'm not saying that we're not in a recession, just that as I watch all my ex-colleagues nervous as hell about their jobs I'm also watching a lot of other people building successful businesses.
That's conclusive then
My previous experiences were very much involved in the IT sector, banking, software houses, consultancy, finance etc.
These days, where I have a lot of contact with blue collar style businesses, it's interesting to see the different views. There are a lot of thriving businesses outside of traditional corporate life and manufacturing.
I'm not saying that we're not in a recession, just that as I watch all my ex-colleagues nervous as hell about their jobs I'm also watching a lot of other people building successful businesses.
That's conclusive then
Agree with Teds comments there - I work in IT and no I havent been made redundant and its not looking that I will be in the coming months either (though touch wood just in case)... Whats the phrase - "In good times even bad companies do well, in bad times only the good survive".
I am pretty certain that a lot of the so called woe in the IT sector has been caused by over-enthusiasm, blind faith and utter stupidity (or a combination of all three). Some good companies have gone down, but the are the rare exception - most others that have suffered have done something wrong..... I also do a lot of work in the finance sector (IT Security consultancy you see) and know a lot of what goes on. When times were good they filled their expensive offices with contractors and consultants on £700 - £1000 per day.... hardly justifiable in the real world. When the crunch comes, who do they let go? The contractors and consultants.... unsuprising there then! And if I hear one more person bitching about not having any work for a year I will punch them.... because inevitiably they are the morons on £700 - £1000 per day (from the people that I have met by the way) - and if you want to do the sums on that, its an average working year of 240 days so you can work out how much they were earning.....
Then you have the "big four" consultancy houses - charging out at £1500 - £2000 per day. Burn rates of £250,000 per week for some clients... not really something that can be justified in the great scheme of things. So strangely the customers put the brakes on and low and behold a bunch of consultants are on the dole.... but dont forget that they would have been on £100,000 and get a minimum of 3 months pay TAX FREE!!!!
Recession - no. Slow down - yes. Pick up in 2003 to 2004 - yes. Blind optimism - yes.... IMO of course.
Cheers,
Paul
P.S. One final comment - Priceline.com was worth more than all of the airlines that it sold tickets for added together (thats over $30Bn). How in the real world is that possible? Cos it was all about greed and blindness to the real issues.... Funny enough Priceline.com is not worth much - just in line with its revenue and potential profitability. The heady days of 1997 - 1999 are long gone, and thank god for that....
I am pretty certain that a lot of the so called woe in the IT sector has been caused by over-enthusiasm, blind faith and utter stupidity (or a combination of all three). Some good companies have gone down, but the are the rare exception - most others that have suffered have done something wrong..... I also do a lot of work in the finance sector (IT Security consultancy you see) and know a lot of what goes on. When times were good they filled their expensive offices with contractors and consultants on £700 - £1000 per day.... hardly justifiable in the real world. When the crunch comes, who do they let go? The contractors and consultants.... unsuprising there then! And if I hear one more person bitching about not having any work for a year I will punch them.... because inevitiably they are the morons on £700 - £1000 per day (from the people that I have met by the way) - and if you want to do the sums on that, its an average working year of 240 days so you can work out how much they were earning.....
Then you have the "big four" consultancy houses - charging out at £1500 - £2000 per day. Burn rates of £250,000 per week for some clients... not really something that can be justified in the great scheme of things. So strangely the customers put the brakes on and low and behold a bunch of consultants are on the dole.... but dont forget that they would have been on £100,000 and get a minimum of 3 months pay TAX FREE!!!!
Recession - no. Slow down - yes. Pick up in 2003 to 2004 - yes. Blind optimism - yes.... IMO of course.
Cheers,
Paul
P.S. One final comment - Priceline.com was worth more than all of the airlines that it sold tickets for added together (thats over $30Bn). How in the real world is that possible? Cos it was all about greed and blindness to the real issues.... Funny enough Priceline.com is not worth much - just in line with its revenue and potential profitability. The heady days of 1997 - 1999 are long gone, and thank god for that....
Manufacturing has been in a trough for many years, if as a country we do not make real products to sell especially in export markets, this country's Balance of Payments is going to go down the pan. We are not creating real wealth by making money from services. This current goverment is killing industry!
If the attitude towards manufacturing does not change soon, there is going to be a very big recession. consumer confidence is starting to subside, when joe public stops spending in the shops, where is the company profits going to come from?
end of rant!
If the attitude towards manufacturing does not change soon, there is going to be a very big recession. consumer confidence is starting to subside, when joe public stops spending in the shops, where is the company profits going to come from?
end of rant!
Most economic stats are honestly produced. Definition of unemployment changed a few times (20 odd) mind you, but I don't know any economists who seriously question its reliability.
Certainly a cold wind blowing through financial services at the moment, and I hear of solicitors getting laid off from some of the big firms (first time I've ever heard of this happening). Those two suggests that corporates (who pay fees to the professional services) are pulling in their horns a bit. No bad thing in itself if they stop poncing around with mergers and litigation. However, if they stop capital investment too, then you'll see a viscious circle develop in which they undermine each others businesses and eventually end up laying off staff. If it gets to that stage, or even pre-emptive layoffs as firms anticipate a downturn (as happened during the last downturn), then all bets are off.
Consumer spending may be fickle, but it is also the most potent source of economic activity. As has been said, the level of consumer spending is determined to a large extent by consumers' confidence ... perception of wealth, job security, outlook for the economy. And people can easily talk themselves into a recession as a result. People's sense of wealth at the moment is probably mixed ... on the one hand property "wealth" is strong, but people are getting worried about its stability; a lot of people are worried about the state and security of their pensions, and everyone with stock market investments must be smarting. But unemployment is low, salaries are pretty strong ... and few major firms are laying off staff. Big news stories at the moment suggest increasing uncertainty in the economic outlook (continuing buggered up economy in Europe, possible wars, US economy looking fragile), and that in itself is a negative as people tend to be risk averse.
Looking out the window I'd say the property firms are up sh*t creak. I've never seens so many building sites, half finished office blocks ... and so many for sale signs. Always used to be a great leading indicator for the end of the world ...
Certainly a cold wind blowing through financial services at the moment, and I hear of solicitors getting laid off from some of the big firms (first time I've ever heard of this happening). Those two suggests that corporates (who pay fees to the professional services) are pulling in their horns a bit. No bad thing in itself if they stop poncing around with mergers and litigation. However, if they stop capital investment too, then you'll see a viscious circle develop in which they undermine each others businesses and eventually end up laying off staff. If it gets to that stage, or even pre-emptive layoffs as firms anticipate a downturn (as happened during the last downturn), then all bets are off.
Consumer spending may be fickle, but it is also the most potent source of economic activity. As has been said, the level of consumer spending is determined to a large extent by consumers' confidence ... perception of wealth, job security, outlook for the economy. And people can easily talk themselves into a recession as a result. People's sense of wealth at the moment is probably mixed ... on the one hand property "wealth" is strong, but people are getting worried about its stability; a lot of people are worried about the state and security of their pensions, and everyone with stock market investments must be smarting. But unemployment is low, salaries are pretty strong ... and few major firms are laying off staff. Big news stories at the moment suggest increasing uncertainty in the economic outlook (continuing buggered up economy in Europe, possible wars, US economy looking fragile), and that in itself is a negative as people tend to be risk averse.
Looking out the window I'd say the property firms are up sh*t creak. I've never seens so many building sites, half finished office blocks ... and so many for sale signs. Always used to be a great leading indicator for the end of the world ...
kend said: Manufacturing has been in a trough for many years, if as a country we do not make real products to sell especially in export markets, this country's Balance of Payments is going to go down the pan. We are not creating real wealth by making money from services. This current goverment is killing industry!
If the attitude towards manufacturing does not change soon, there is going to be a very big recession. consumer confidence is starting to subside, when joe public stops spending in the shops, where is the company profits going to come from?
end of rant!
couldn't agree more. We supply machinery to manufacturing industry, and the decline started (coincidence?) when labour came to power in 1997. The english side of our business is almost dead.
If a country doesn't "make" something of high value from cheap raw materials then it does not generate wealth - and IMHO will ultimately go down.
Rgds, WalterU
Todays climate is quite simply unsustainable,it will change for sure but how much is the key to who sinks or swims.You only have to see how many new cars have been sold over the last 12 months to realise how people have been fuelling the fire.As the general public get equity in their homes they feel comfortable spending,as we have all seen.The slightest hint or turnaround in the feelings of wealth and good times that come with equity, it all sprials into worry.Its a terrible circle of events and there is no avoiding it.At least at the moment we don't have the huge interest rates.
Perhaps the message of the 90's should have been" save for a another day"
Another scarey thought is the level of personal debt on CC's as well as the debt per household versus income.We have record levels of both in the UK.
I recieve copies of the bankrupt business totals and we're getting high(not sure if thats linked or just a sign of peoples carefree atitude to going bust)either way,it would be foolish not to take a deep breath and plan for the even more difficult times ahead.
Perhaps the message of the 90's should have been" save for a another day"
Another scarey thought is the level of personal debt on CC's as well as the debt per household versus income.We have record levels of both in the UK.
I recieve copies of the bankrupt business totals and we're getting high(not sure if thats linked or just a sign of peoples carefree atitude to going bust)either way,it would be foolish not to take a deep breath and plan for the even more difficult times ahead.
Slightly off topic - but anyone see the article in the paper the other weekend - middle class families buying up the stock of BioHazard suits for their children, getting portable gieger counters for the home etc......
Worrying about the economy is fair enough - but this might be a little too far...
Cheers,
Paul
Worrying about the economy is fair enough - but this might be a little too far...
Cheers,
Paul
Several contributors to this thread have stated that there is not currently a problem in their own industry. Whilst that is true at the moment it isn't very encouraging because if there is one thing that will kill any business it's their customers running out of money (no business is an island)
John
John
Official definition of recession is something like "two full quarters of negative growth in GDP"
Correct my man, and we haven't had this yet.
Though manufacturing has been lacklustre for years now, don't forget this now represents a very small proportion of UK growth. We are essentially a service economy now, though I do feel for the co.'s/those employed in the UK manufacturing industry. Price deflation globally is slowing putting these co.'s out of business.
Won't bore you any more but any pick up in GDP is a function of US growth, and at the moment it looks like the US consumer muddles through in H1, with H2 hopefully improving. Perhaps 3% (sub trend) US GDP growth for 03.
If it's any consolation the UK has been the fastest growing G7 economy in the last 18mths, and relatively insulated from external events.
I want to move jobs, but in my field there's no point, there are no jobs out there.
Correct my man, and we haven't had this yet.
Though manufacturing has been lacklustre for years now, don't forget this now represents a very small proportion of UK growth. We are essentially a service economy now, though I do feel for the co.'s/those employed in the UK manufacturing industry. Price deflation globally is slowing putting these co.'s out of business.
Won't bore you any more but any pick up in GDP is a function of US growth, and at the moment it looks like the US consumer muddles through in H1, with H2 hopefully improving. Perhaps 3% (sub trend) US GDP growth for 03.
If it's any consolation the UK has been the fastest growing G7 economy in the last 18mths, and relatively insulated from external events.
I want to move jobs, but in my field there's no point, there are no jobs out there.
Too many people and not enough pie...
And yes, a recession can be 'talked up' like any self fulfilling prophecy.
Having said that, I always get concerned when hyper car manufacture starts looking commonplace and politicos start banging the drums of war; it's often a distraction from domestic intractables...
(And Lord knows, we've got enough of those.)
And yes, a recession can be 'talked up' like any self fulfilling prophecy.
Having said that, I always get concerned when hyper car manufacture starts looking commonplace and politicos start banging the drums of war; it's often a distraction from domestic intractables...
(And Lord knows, we've got enough of those.)
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