The state of the economy at the street level

Tyler Durden · 20 May 2014

I don't catch taxis often, but when I do, I like to have a chat with the driver and get his/her views on the state of the economy. It can be quite an interesting chat.

I also like to walk a lot, and perhaps it's due to my 'bear-ish' nature, but I have noticed a lot of shops closing down on the streets I walk on. Some of these have been in existence for quite a while (like 5+ years) and some seem short lived.

More recently, I have noticed some friends within my circle to be losing their job or struggling with their career stability. It almost feels like the grim reaper of redundancy is circling me like a shark.

So from my own personal, and microscopic experience, the state of the economy appears to be somewhat gloomy, or at the very least, cautious.

I'm interested in the views of others on their own personal/street level/coal face level on how they feel the economy is going or will be going. Please feel free to share

So_Cynical · 21 May 2014

I get a distinct upbeat feeling when walking and talking about town, i have a new and better paying job and have put my semi retirement to one side for a while, residential apartment construction seems to be taking off, lots of road works and shops opening.

Faramir · 21 May 2014

Most business owners I know and myself have experienced a downturn since July last year. Sometimes I have good months but my phone is much quieter than it was this time last year.

beachlife · 21 May 2014

most business owners I talk to say its quiet and complain that staff want top $$, have no pride in their work and think its their right to play with social media all day. I also notice lots of for lease signs in the nearby light industrial area, and lots of vacant land in a recently developed industrial park. Heard of one bloke that just closed his 20 year business because overheads are too high. No doubt that the boom is over.

trainspotter · 21 May 2014

Cashflow is at critical levels IMO. The velocity of money through the economy is evidently slow with most accounts going past 90 days as people struggle with general cost of living and also rising prices of amenities.

Zedd · 21 May 2014

There's been a slow grind down in the amount of work we've been getting out of the government sector for the last 12 months.

The engineering job market is giving an interesting vibe. There are plenty of jobs for senior level staff but limited ads out for low to mid experience levels. Word is that there is a decent amount of money on the side for some significant projects in Brisbane looking to start 2nd half of this year / early next year - hence the need to hire senior now, and less experienced later.

sptrawler · 21 May 2014

On the street in my area, the only things thriving are building companies and people operating fast food outlets or selling boutique coffee and cakes.

Most businesses relying on discretionary spending eg furniture, whitegoods, curtains etc are struggling or have already closed.
Apparently owners, aren't cutting commercial tenants much slack, when it comes to rent.

There seems to be quite a few small engineering style businesses being bought by South Africans, in my area. Baby boomers wanting to retire seem to be taking this opportunity to sell their business.

The local council was recieving about 6 applications for general hand advertisements, a couple of years ago, now the number is closer to 40. My son works in mining and says the same applies, huge amount of applicants.

If the housing construction sector falls over, I think Perth will really feel it. However on that subject brickies aren't getting the same money/brick as they were in the last boom, a mate tells me.

So I think, things feel as though they are just static, going nowhere fast. IMO the governments are definately heading in the right direction with infrastructure spending.
With luck that will see us over untill the next cycle, when we become competitive again.

I personaly don't think we are out of the woods, I don't think weve found the map yet.lol

Wysiwyg · 21 May 2014

If responses are honest, this thread could be a valuable data mine.

Immigrants on the increase?

I went to Brisbane for a couple of days earlier this month and caught 5 taxi rides in that time. Driving every taxi was not a man with his fat guts rubbing on the steering wheel or a scruffy red neck wreaking of cigarette smoke. No, each of the 5 taxi rides was driven by an Indian from the country India. They all looked similar in being clean shaven, well spoken, slim and dressed appropriately.

This tells me that if you're in another country, are intelligent, appreciative and want to work then Australia is the number one destination if you wish to build a quality life.

CanOz · 21 May 2014

Wysiwyg said:
If responses are honest, this thread could be a valuable data mine.

Immigrants on the increase?

I went to Brisbane for a couple of days earlier this month and caught 5 taxi rides in that time. Driving every taxi was not a man with his fat guts rubbing on the steering wheel or a scruffy red neck wreaking of cigarette smoke. No, each of the 5 taxi rides was driven by an Indian from the country India. They all looked similar in being clean shaven, well spoken, slim and dressed appropriately.

This tells me that if you're in another country, are intelligent, appreciative and want to work then Australia is the number one destination if you wish to build a quality life.

I was amazed at that to Wys. I think most of our taxi driver in Brissy were middle eastern though. We got ripped off by an Eastern European taxi driver from the airport in Sydney to our friends townhouse. Should have been $20 and cost us $48 because we weren't paying attention, ar$s hole!

Allot of Asians in Sydney and Brisbane, 20-30% i would think at most times on the street, in the supermarkets....

Thats good for Australia, some new Asian money. Fewer of the old negative wining union types would make it so much more pleasant. The "gimme this, I deserve that types"!

Smurf1976 · 21 May 2014

It's much easier to get hold of a contractor at short notice than it used to be. They want every job they can get, and will pretty much bend over backwards to avoid saying no. So that's a negative in terms of the broad economy.

But on the other hand, government spending on infrastructure does seem to be picking up. No hard data there, just the general impression I have at the moment.

As for the energy business, it depends hugely on what sector but the real issue comes down to falling demand and rising gas prices and all that comes with it. Some outright winners, some outright losers and a few who can simply trade through it all and come out roughly even over the longer term. But as a broader economic indicator, electricity demand has been trending down for the past few years now. Gas hasn't seen that pattern thus far, although with the imminent price surge it's likely only a matter of time. Given that all economic activity requires energy in some way, demand is a reasonable proxy for the state of the "real" economy - it's not 1:1 by any means but there's a definite linkage.

sptrawler · 21 May 2014

Smurf1976 said:
It's much easier to get hold of a contractor at short notice than it used to be. They want every job they can get, and will pretty much bend over backwards to avoid saying no. So that's a negative in terms of the broad economy.

But on the other hand, government spending on infrastructure does seem to be picking up. No hard data there, just the general impression I have at the moment.

As for the energy business, it depends hugely on what sector but the real issue comes down to falling demand and rising gas prices and all that comes with it. Some outright winners, some outright losers and a few who can simply trade through it all and come out roughly even over the longer term. But as a broader economic indicator, electricity demand has been trending down for the past few years now. Gas hasn't seen that pattern thus far, although with the imminent price surge it's likely only a matter of time. Given that all economic activity requires energy in some way, demand is a reasonable proxy for the state of the "real" economy - it's not 1:1 by any means but there's a definite linkage.

Same here in W.A smurph. Kwinana stage C is to shutdown next year, that means 4 x 120's and 2x 200 steam units will have closed down in the last few years. Essentialy only 2 x 100 hegt's have been installed, load musn't be a problem, I haven't heard of any new base load plant going in, on the grapevine.
Coal mining in Collie appears to be going pear shaped, they could do with another big unit there but the carbon tax scared everyone IMO.

beachlife · 21 May 2014

Smurf1976 said:
It's much easier to get hold of a contractor at short notice than it used to be. They want every job they can get, and will pretty much bend over backwards to avoid saying no.

We have a wood patio and we want to replace the shade cloth with poly. No one interested, they all want to rip it down and build a new steel one for between $10-$14k, except for the one bloke that said he will sheet it for $8k. I reckon $800 in materials. They want work, but only top $$ jobs.

Same for a small steel fence we want moved. We have taken it out, its about 8m long, with only 4 posts. They want $2k to dig 4 holes and stand it up. Will do it myself for a few hours work and $40 in rapid set.

sptrawler · 21 May 2014

beachlife said:
We have a wood patio and we want to replace the shade cloth with poly. No one interested, they all want to rip it down and build a new steel one for between $10-$14k, except for the one bloke that said he will sheet it for $8k. I reckon $800 in materials. They want work, but only top $$ jobs.

Same for a small steel fence we want moved. We have taken it out, its about 8m long, with only 4 posts. They want $2k to dig 4 holes and stand it up. Will do it myself for a few hours work and $40 in rapid set.

What area of Aus, are you from Beachlife?

beachlife · 21 May 2014

Perth

pinkboy · 21 May 2014

I think it was Sir Joe BP who knew the economy by staring out the window of his office and counted the amount of cranes in the skyline.

When I was driving home from a mine last Wednesday I did a little experiment similar:

160km stretch of highway (Peak Downs Highway) and we counted all the freight trucks heading on the way out as we drove back into Mackay mid morning. Knowing full well there used to be many morning, afternoon and an evening run out to all the mines out there in the Bowen Basin, it would be a good indicator. We saw 5, yes only 5 general freight trucks. That ain't a lot for 30+ mines who used to demand freight not just yesterday but last month when they needed gear 6-2 years ago. Was sad to count so few. We saw a few fuel tankers and 4 more trucks carrying concrete pillars probably for a bridge but that's all. I reckon at the peak there would have been close to 50 trucks every morning, 50+ more throughout the day every day in boom times.

So the slow down was as evident as fewer cranes in the skyline for Sir Joe.

pinkboy

sptrawler · 21 May 2014

beachlife said:
Perth

Well that's understandable, the amount of residential building going on around Perth is out of control.
Trying to get anything done associated with housing, will cost heaps, because they are flat out. As I said in the 7th post in this thread.

qldfrog · 21 May 2014

Brisbane is dead: just drive in industrial estates or try to find a job;
and no mc donald does not count!

Tyler Durden · 21 May 2014

One observation I've noticed here in Sydney is there seems to be a noticeable amount of petrol stations closing. Not really sure why, but then again, I guess you don't really need one on each side of the road. I assume that residential property will be built over it, even though the land has to remain vacant for 5 years (I think?).

coolcup · 21 May 2014

Some observations from me. I live in the lower north shore of Sydney:

1. Restaurants / bars are full and busy

2. Shops selling clothes, furniture, ornaments, decorations are empty

3. Residential apartments are coming out of the ground everywhere

4. The local hand car wash is suddenly flush full of cars. 12-18 months ago there were only your typical BWM / Mercedes / Audi types. Now it is your VW, Nissans, Mazdas and Toyotas

I get the sense people are willing to spend on smaller pleasures but are deferring big ticket expenditure (aside from real estate).

waterbottle · 21 May 2014

coolcup said:
Some observations from me. I live in the lower north shore of Sydney:

1. Restaurants / bars are full and busy

2. Shops selling clothes, furniture, ornaments, decorations are empty

3. Residential apartments are coming out of the ground everywhere

4. The local hand car wash is suddenly flush full of cars. 12-18 months ago there were only your typical BWM / Mercedes / Audi types. Now it is your VW, Nissans, Mazdas and Toyotas

I get the sense people are willing to spend on smaller pleasures but are deferring big ticket expenditure (aside from real estate).

I can definitely confirm point #2 in the inner west. Apartments are springing up everywhere. As for cars, there seem to be many more Audis, BMWs and mercedes these days.

The state of the economy at the street level

Tyler Durden

So_Cynical

The Contrarian Averager

Faramir

Very New Investor

beachlife

trainspotter

Zedd

sptrawler

Wysiwyg

Everyone wants money

CanOz

Home runs feel good, but base hits pay bills!

Smurf1976

sptrawler

beachlife

sptrawler

beachlife

pinkboy

sptrawler

qldfrog

Tyler Durden

coolcup

waterbottle

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The state of the economy at the street level

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