The recession has started?

[Smurf1976]

Anecdotally, I'm starting to see rather a lot of evidence that suggests a recession or at least a serious slowdown is here and now.

Examples:

At work I deal with lots of contractors, for which we are generally a small customer. All of a sudden none of them are busy. All these are doing some sort of physical work (as opposed to consultants etc).

Contractor 1. I phoned and the person who took the call openly admitted they had no work on. The started on our job the next day.

Contractor 2. Has been flat out historically and we've always had to wait weeks or months. They have now fully caught up with all our work and asked if we had anything else coming up.

Contractor 3 (self employed). Normally hard to get as it's specialised work. Was at home when I phoned and he offered to do the job 2 business days after the call.

Contractor 4. Again fairly hard to get and specialised. They're doing the work on the first day I suggested.

Contractor 5. They're doing a major job at the moment and staff on site are quite visibly going as slow as they can get away with. And we're now into the thrid foreman on this job in roughly 4 months. It turns out they have no work on once it's finished and staff have been leaving.

Buying a new vehicle (for business use). Was put straight through to the manager, not just a salesperson, who without asking offered to do anything possible to help with prompt delivery etc. It's just a ute so nothing special and we've never got service like that before. And they're the only dealer of that make in town so it's not like there's fierce competition.

Vehicle service. I've booked 3 in recently and in all cases was able to get it done straight away. Normally I'd expect a week or two wait.

And the one that prompted me to post this. I went shopping today. Normally I don't do supermarket shopping on Saturday to avoid the crowd and queues. Bottom line is that I walked past every shop in the shopping centre and couldn't find a single one that looked busy. The whole place was noticeably quiet compared to, say, 3 months ago on a Saturday. Even Coles had checkout staff waiting around with nothing to do.

And I'm starting to think that way myself too. Handing over some $ for lunch I looked at the price, thought about the fact that every time I go shopping something has gone up, and realised that I really can't justify paying for overpriced lunches anymore when I could easily cook the same thing at home far more cheaply. And so there's another customer gone from another small business.

Likewise the most spendthrift person I know has suddenly started over paying their mortgage. They've always spent everything they earn so they must have cut back on something. Add in rising food etc costs and that would presumably be a significant cut in their discretionary spending. Another store, pub or whatever that's lost a customer.

So overall, everywhere I look I see signs of a slowdown . Maybe it's just what I'm seeing and not really representative, but overall it doesn't look good to me at all. And it seems to be accelerating quite rapidly in the past couple of months.

I also note that talk of a "skills shortage" has abruptly ended in the media. Another sign.

 

[juddy]

Here's a couple of ways to tell if a recession has started:

1) Check the local Good Sammy, Salvo Army et al store to see how much 'quality stuff' there is in stock.

2) Have a look at the goods thrown out at kerbside 'bring out your dead' collections.

Seriously though, I know what you mean Smurf. I'm in charge of maintenance at a large hospital. Getting contractors, quotes etc is a breeze now as compared to 2 years ago...and this is in Perth.

 

[M34N]

I work in retail, and deal with people mostly the construction industry, and have noticed a slowdown not so much in the cash customers, but account customers. The past year we grew over 10%, but this July gone was the first month in the past 2 1/2 years that we did not beat the previous year's figures. And for the first time in a long time, we have been 'dead' in the sense that we have actually had the time to finish things on the spot instead of constant interruptions! And like you have said smurf, a lot of contractors/builders are commenting on drops in jobs and talked about things being slower. As a result our cash customer base has grown vs. account customers by around 20%.

Seems that businesses are cutting back on expenditure, and have noticed fewer and fewer new projects starting in the past few months. Even house sales have seemed to have evaporated lately from what I have seen around my area.

Strangely though, traffic levels have still been noticeably bad as per usual and not better, which I would of thought would be another sign of a slowdown? Maybe it's because the job losses haven't kicked in yet. And I typically have lunch at a major shopping centre, it's noticeably a bit quiet in the major food courts, whereas a few months ago finding a spot to sit down used to be impossible. And looking for parking spots has been easier too.

I guess it's just a question of whether this is a sign of people just temporarily cutting back or if it's permanent. Maybe we will see a pick up from here, but for now it sure seems to be slowing down.

 

[MRC & Co]

The wheels are sure in motion.

I know small retail/hospitality business owners and every single one (even the most robust) are slowing.

Investment and the finance industry take the first hit, then it flows over the consumer cyclicals, retail etc. It has been seen in the States, they thought we would be able to contain it within the Australian financial industry at first, looks like that AINT happening.

 

[So_Cynical]

I too think the slowdown has begun.

In the Business park where i work, 2 tenants have "gone under" in the last 2 months.

optima was Aust largest PC assembler and a big technology wholesaler.

http://pages.optima.com.au/

The other was a sml/mid sized Transport (trucking) company.

 

[robots]

hello,

yes things slowing in retail, food etc

my work in the construction industry is still enormous, we are continually looking for reliable people,

thankyou
robots

 

[constable]

hello,

yes things slowing in retail, food etc

my work in the construction industry is still enormous, we are continually looking for reliable people,

thankyou
robots

ditto melb is still booming as far as housing and construction goes and i guess this is reflected by the govt now talking about restricting immigration to victoria. i know we havent been busier but we are a smaller co that can readily increase its market share and so far have failed to see any impact real or imagined.

 

[noco]

Here we go again under Labor, the recession we had to have.
During the Howard /Costello 11 years in office they were able to ward of recessions in Asia and Japan through good economic mamagement. Rudd and Swan with their stupid ETS will only exacerbate the problem and create further hardship for "the working families" who they portray to protect.
To all those who voted Labor Nov 2007, I'll bet you are all having second thoughts today.
We can look forward to higher cost of living and higher unemployement in the coming months; Labor cannot use the blame game any more. Unfortunately, Rudd and Swan just don't know what to do except blame others.

 

[kotim]

noco, Mate I am no particular fan of RUDD but NOT ONE BIT OF BLAME CAN BE PLACED ATTHE FOOT OF LABOUR.

The excesses that are in the economy now that WERE EXACERBATED by the huge credit expansion should theoretically have been controlled by the HOWARD government. Everyone knows that after boom comes bust and it is a matter of controlling the bust and hopefully having a soft landing.

In the end that is theoretically controlled by the Government of the day in its expansion phase.

John HOWARDS main claim to fame for controlling inflation was that he stopped wages growth.

John HOWARDS was pathetic. Real wages have been reduced year after year under HOWARD, and the only thing that prevented a real problem was that we had a huge commodities boom that allowed jobs for everyone, so that women with families could get full time jobs at the drop of a hat, or any other type of part time work they wanted.

The sad fact is that once interest rates went up and people were fully employed with no where to go, money was gong to be short.

Are you aware that when we consider inflation that to get the inflation rate in wages growth you have to add onto the top to allow for tax. In fact with inflation currently running at about 4.5% and a taxation rate of roughly 33% for a round figure, you have to be given a 6% pay rise so that after tax you end up witht the inflation rate of 4.5%. Let me ask you how many people this year are going to get 6% pay rises.

Do the maths over the years and you will soon realise that real spending power has been eroded over the years (both labour and liberal are responsible for this, however Liberals policy is less for the workers so they are the main offenders)

My brother in law was earning 65-70 grand a year at MIM in Mt Isa in the early 80's as a labourer. Most workers in the mines at Mt Isa certainly aren't on much more than a hundred g's give or take a bit. Sit down and compound out the inflation rate for the last 25 years and work out what 70 grand is worth today.

 

[noco]

noco, Mate I am no particular fan of RUDD but NOT ONE BIT OF BLAME CAN BE PLACED ATTHE FOOT OF LABOUR.

The excesses that are in the economy now that WERE EXACERBATED by the huge credit expansion should theoretically have been controlled by the HOWARD government. Everyone knows that after boom comes bust and it is a matter of controlling the bust and hopefully having a soft landing.

In the end that is theoretically controlled by the Government of the day in its expansion phase.

John HOWARDS main claim to fame for controlling inflation was that he stopped wages growth.

John HOWARDS was pathetic. Real wages have been reduced year after year under HOWARD, and the only thing that prevented a real problem was that we had a huge commodities boom that allowed jobs for everyone, so that women with families could get full time jobs at the drop of a hat, or any other type of part time work they wanted.

The sad fact is that once interest rates went up and people were fully employed with no where to go, money was gong to be short.

Are you aware that when we consider inflation that to get the inflation rate in wages growth you have to add onto the top to allow for tax. In fact with inflation currently running at about 4.5% and a taxation rate of roughly 33% for a round figure, you have to be given a 6% pay rise so that after tax you end up witht the inflation rate of 4.5%. Let me ask you how many people this year are going to get 6% pay rises.

Do the maths over the years and you will soon realise that real spending power has been eroded over the years (both labour and liberal are responsible for this, however Liberals policy is less for the workers so they are the main offenders)

My brother in law was earning 65-70 grand a year at MIM in Mt Isa in the early 80's as a labourer. Most workers in the mines at Mt Isa certainly aren't on much more than a hundred g's give or take a bit. Sit down and compound out the inflation rate for the last 25 years and work out what 70 grand is worth today.

Kotim "old mate", I was born in the 1930 recession and as I grew older I saw how my parents had to struggled under variuos Labor Governments.
I started work as an apprentice plumber on the equivalent of $2.19 per week.
I remember the tough times under Whitlam, Hawke and Keating; the loss of wages through strike after strike by militant unions in the builing industry. I also remember the 9 months strike at MIM created by Mackie. Thank God John Howard put an end that; days lost from strike action was almost reduced to zero during his term in office.
According to statistics real wagers increased by 17% under John Howard but actually went back under Hawke and Keating. Suggest you do some home work of your own and you may find I am closer to the point.
I am now a pensioner and finding it tougher than you "old mate" and KRUDD AND SWANIE could not care less about the real battlers. We managed to get by under John Howard. With the skyrocketing of food prices and fuel they have not offered one cent assistance. I would love to have an increase of 6% in the pension.
Don't be too optimistic of a Labor $21B surplus after 2010. We will most likely be in the RED just as all the Labor states are at the moment.
Perhaps you may be in the same position some day and know what it is really like to struggle.

 

[MRC & Co]

Noco, may want to learn a bit about economic cycles and economics for that matter.

What do you think Hawke did for the economy, his reforms were the basis for the Howard Government, not exactly traditional labor reforms, no? Whitlam was a bum as far as economic management, like Communism, good in theory.

How was Howard going to fight off an economic slowdown in Australia due to a global crisis. Rate cuts? Fiscal stimulation? What micro-economic reforms? I would be interested to know..........

 

[chops_a_must]

ditto melb is still booming as far as housing and construction goes and i guess this is reflected by the govt now talking about restricting immigration to victoria. i know we havent been busier but we are a smaller co that can readily increase its market share and so far have failed to see any impact real or imagined.

Wouldn't have thought you would dare to show your face in here again...


Anyway, construction has slowed to a trickle in Perth, in terms of new projects. Tradey rates are being slashed etc. What more do you want in the place that has held the national economy afloat?

 

[white_goodman]

Noco, may want to learn a bit about economic cycles and economics for that matter.

What do you think Hawke did for the economy, his reforms were the basis for the Howard Government, not exactly traditional labor reforms, no? Whitlam was a bum as far as economic management, like Communism, good in theory.

How was Howard going to fight off an economic slowdown in Australia due to a global crisis. Rate cuts? Fiscal stimulation? What micro-economic reforms? I would be interested to know..........

you have a point but i always find it interesting/funny that its always the battlers/labour constituents who manage to be the worse off under labour govt's.... however this is based upon my 20 years of knowledge

 

[Smurf1976]

With the skyrocketing of food prices and fuel they have not offered one cent assistance. I would love to have an increase of 6% in the pension.

...
Don't be too optimistic of a Labor $21B surplus after 2010. We will most likely be in the RED just as all the Labor states are at the moment.

As for food and fuel, what is Labor or Liberal, supposed to do about geological factors limiting the oil supply and a foolish global rush to put food in petrol tanks? Nothing much that anyone can do in the short term unless you count inducing a general economic slowdown. They could, of course, do something to make things better in 10 or 20 years time - I'd give both an "F" for their efforts in that regard. Fail for the other parties too.

As for the ALL the Labor states being in the red, that's simply not correct on the assumption that being "in the red" means accumulating debt today rather than simply having debt that was run up years ago by whoever was in government at the time. If you take the latter criteria then Howard also spent years "in the red" during the 1990's.

Back to the original topic, I think we're headed for a serious recession no matter who is in government now. The wheels seem to be in motion and it's been inevitable ever since the housing bubble began all those years ago. And no, I'm not blaming Howard - Australia isn't the only place it's happened.

The way I see it, we've got consumers up to their necks in debt and they've started to worry. Now with a slowdown underway, they'll start worrying about employment security thus continuing the cycle and making the outcome inevitable. And I'm seeing rapidly mounting evidence that it's happening now here and overseas.

 

[Smurf1976]

Anyway, construction has slowed to a trickle in Perth, in terms of new projects. Tradey rates are being slashed etc. What more do you want in the place that has held the national economy afloat?

Trades rates being slashed as in no growth or slight reductions? Or slashed as in 50% or something drastic like that?

 

[chops_a_must]

Trades rates being slashed as in no growth or slight reductions? Or slashed as in 50% or something drastic like that?

In some cases 10-20%

But the builder I talk to quite often has basically laid off everyone, bar the best he has accumulated over the last few years... and only putting on work to keep these guys in bread.

 

[marklar]

Funny isn't it how all those Real Estate agents that wouldn't even bother to return a phonecall a year ago are now 'suddenly' finding my contact details and calling me back?

Funny how getting a tradie around for a measure & quote is now able to be done at a time that suits me.

Can't walk through a car yard anymore and be left alone.

Yup, recession has started...

m.

 

[moXJO]

NSW south of Sydney

Never had so much construction work. While the Mcmansions (house and land deal) work has stopped completely. The reno type and custom type homes has picked up considerably this past year. Had to cautiously put on another 4 workers. I’m charging up to 30% more on the jobs I don't want and still getting them. We were quiet about 2-3 years ago, for about 12 months. Stockpiling money with all the bearish talk though. If anything this downturn will obliterate a lot of competition as the tradies run to the mines and other safer options. And create even more of a skills shortage.Good times for me atm

 

[robots]

NSW south of Sydney

Never had so much construction work. While the Mcmansions (house and land deal) work has stopped completely. The reno type and custom type homes has picked up considerably this past year. Had to cautiously put on another 4 workers. I’m charging up to 30% more on the jobs I don't want and still getting them. We were quiet about 2-3 years ago, for about 12 months. Stockpiling money with all the bearish talk though. If anything this downturn will obliterate a lot of competition as the tradies run to the mines and other safer options. And create even more of a skills shortage.Good times for me atm

hello,

spot on moXJO, 2 bricklayers have decided to pack up and go to mines,

with the cost of living being spoken about in these communities I am not sure if they will be better off,

thankyou
robots

 

[dhukka]

Interesting thread. Sometimes I think the amount of energy expended talking about economic statistics is not half as useful as the anecdotal evidence of the type on this thread.

I don't live in Oz but I'm currently on holiday, been back about 12 days so far. I spent three nights at Magnetic Island, beautiful spot. Got talking to a cleaner who cleans holiday apartments, she said she was cleaning 6 - 8 apartments a week this time last year. Told me that if she wasn't cleaning the apartment I was staying in she wouldn't have any work.