Petrol prices, groceries, interest rates, and inflation are all on the rise, practically everywhere in the world, and in New Zealand we have the added frustration of a scarcity of essential building supplies to satisfy what is touted as a ‘building boom. All the signs are there that a recession may not be far away. I find myself driving past gas stations and trying to ignore the daily increasing price per litre illuminated on massive signs. I read about the desperation of Kiwis struggling to buy essentials. Every day at least one of the major online news platforms voices the frustrations of builders held to ransom by the frankly ridiculous management of plasterboard by the company that has a 94% dominance of the domestic market.
There’s a lot of doom and gloom about the economy and there’s no escaping it is driven by factors beyond our control – the pointless and bloody Russian invasion of Ukraine and the continuing ripples of the Covid-19 pandemic. Even still, solutions are hard to find and consumer confidence is taking regular hits. As a good friend reminds me, economic performance is driven by sentiment and right now that sentiment is plummeting. I try and remind myself that boom and bust are regular elements of the financial curve and that we have been in worse times, with higher interest rates, much larger inflation, and even greater fuel prices that have constricted the functionality of our economy.
But this is all coming after, or close to the end of (hopefully!) a global pandemic that has massively affected all of our lives. A recession on the horizon feels all the worse – perhaps because of the huge government borrowing that will take many decades to pay back, or perhaps because the world just feels very, very different. The fact that we are being fleeced at the pumps while gas companies still make billions of dollars also feels a bit raw. Sure there’s shareholders to satisfy but that reasoning gets a little old while everyone suffers. At least it makes the idea of an electric vehicle all the more compelling.
So, I guess that’s enough moaning and enough blaming, even if it feels good to vent, a little. It just achieves absolutely nothing. To counter that, here’s some good things to consider. Consumers will still spend during a recession, they will just be more careful about how and where. At some point soon there will be solutions to the building supply crisis. I also believe that the stupidly considered war in the Ukraine will end before too long. OK, that’s an opinion but I do not imagine the Russian government can sustain an unpopular and damaging war that is eroding its trade options and its own financial well-being. You’d think the guilt over slaughtering civilians for no point whatsoever may also register with them, after a time.
When we truly open up again the shortages in staff and workers will correct itself, and slowly repair the damage done to a number of our sectors due to Covid travel restrictions. In short things will get better, they always do. I do struggle to find uplifting sentiment but I find that surrounding yourself with positive people helps immensely and after all it will be positivity that turns that downturn upside down.
