Recession in NZ. Real? Fantasy? Quick? Slow?

[Perry]

A sort-of vague question for resident Kiwis.

What are you seeing and hearing? I'm not
referring to media or official BS, just "what's
the word on the street?" I appreciate that
not all such gossip can be substantiated.

At a recent social club meeting, places for
a mid-winter get-together were discussed.
Inquiries revealed that one place was now
only trading Thu, Fri, Sat & Sun and another
was closing down on Friday.

In a phone call today, I was told of an iconic
(long-established, local) hairdresser's closure.
An electrical wholesaler has closed a suburban
branch to consolidate on the 'one in town.'

A tenant contacted me to say that last Friday's
rent AP had failed and the tenant would be
'round with the cash, early next week.'

I wonder if people expected the/a recession
to be accompanied by a trumpet fanfare, 21-
gun salute, plus thunder & lightning?

I see it (how do you?) as a slow, meandering
thing. A shop closed here; a finance company
failed there; two used car yards amalgamating;
a factory shut down; people being made redun-
dant; a mortgagee sale . . . .

Just slow and steady, down the gurgler.

What signs do you see & hear, about you?

[[email protected]]

I could fill pages with businesses and people going to the wall over the next 8 to 12 weeks. I call it the end of the beginning.
The banks are determined to avoid starting an avalanche but I don't know how long that can last. There are an awful lot of people in trouble still. Not to mention those not paying PAYE and GST etc.

[Perry]

Well, Dean, not wishing to be provocative,
I was more meaning what's happened (past
tense) rather than what's predicted. Prophecy
is a dangerous thing, as most politicians know
to their cost.

[[email protected]]

Oh sorry, my bad. Talk to any insolvency practitioners, they are definitely not in recession!!

[Perry]

No rebuke implied, Dean. Just curious to hear
about present, real-time things. If you're right,
what you describe will get to that stage, soon,
stimulus cheques notwithstanding.

[Stevegoodey]

Most people will tell you I have a tendency to look on the bright side but I have been seeing some good signs.

I was at an open home on the weekend that would have had a line of 25 people waiting for the agent to arrive.

Having said that there are a lot of business premise's empty in my town and some have been that way for a long time.

I've also noticed some great deals on luxury products like nice vehicles and long distance air travel.
I tend to track the list of "Hotrods' for sale on trade me that was hovering round 50 or 60 for the last couple of years.
This week that list hit 200 for a short period of time.

Steve

[summadayze]

Two mates in between jobs (1 white collar, 1 blue collar), family friend who works for a printing firm says they're all on 4 day weeks now. Also noticed lots of For Lease signs and empty retail stores in Takapuna.

[Rosco]

Lots of my business clients are doing better than ever. I think in general good business's are still making good money, its the business's who have been struggling for years that are finally closing down.

Ross

[Perry]

The dynamic seems capricious. Car part wholesalers
are doing well. A "well-placed" person in one local such
entity opined that people were maintaining current cars
longer, rather than trading up, which meant that the
car dealers pain was his business' gain.

[Gatekeeper]

That's what I'm seeing Perry. I'm in the more budget range of accommodation, and I'm up 13% in T/O on the first four months of 2009. I haven't put my prices up since early 2008. I'd say we will do about the same or slightly better than last year, simply because my requisites are suffering inflation, ie: my expenses are up too.

Noticing a lot of NZ'ers coming for short stays, whereas over the past 4 years we had a lot of immigrants with longer term stays as they arrived in and looked for somewhere to live.

The only current bookings I have for immigrants are ones that are leaving NZ, and parents of immigrants coming over to visit their kids and grandchildren.

The dynamics have certainly changed.

[Baron Silas Greenback]

What a good thread! real world stories and anecdotes instead of crystal ball gazing for a change!
Personally I am seeing alot of empty stores and business that have been for sale for a very VERY long time. Same ones in the paper month after month.
I am also involved in a very low end construction company, basically sells kitsets to the poorest people who want to build. Business is booming as demand is bulging at the bottom end... people are mortgage adverse.
Also less factual and more anecdotal, some people who I have never known to be negative, are getting more cautious and resigned.

[drelly]

It's definitely affecting some businesses in a big way. Locally...

- several of the newer real estate offices have closed
- the Wealth Buy Property office has closed
- the Richmastery office is now unstaffed with a sign on the door
- a car dealer has closed
- aluminium joiner went under
- various businesses have cut staff
- I know of another that is considering closing down
- several Northland alcohol reps have lost their jobs (now that's serious!)
- boat charter operator sold his boat
- two local marine engineering firms were saved from liquidation by the skin of their teeth
- lots of empty commercial property

[princess]

I'm in Avondale where houses are selling before auction in the street around from us - guess that is good, but who knows if sellers are desperate or are actually getting good offers.

In my industry though (advertising agencies) most of the companies i know of are either making redundancies (one co has lost over 1/3 staff this year) OR they have a sinking lid policy of simply not replacing staff. One of them had a major client (a bank) cut their marketing budget by 50%, and another had a client reduce their monthly fee by OVER half. Companies are spending their remaining budget on cheap,, tactical advertising, NOT big brand ads generally.

I've been out of work for two months now, but my husband works for a printing company which has just moved into bigger premises to make room for all their work, and some extra plant to cope with demand.

None of the small business owners i know are suffering, it seems to be the corporates and any of their suppliers that are facing tough times.

My sunbed lady has laid off staff but are still busy enough, my mechanic has had the best year ever and my massage therapist says there is more demand than supply. I am thinking of re-training!

[kingkong82]

I'm in Avondale where houses are selling before auction in the street around from us - guess that is good, but who knows if sellers are desperate or are actually getting good offers.

In my industry though (advertising agencies) most of the companies i know of are either making redundancies (one co has lost over 1/3 staff this year) OR they have a sinking lid policy of simply not replacing staff. One of them had a major client (a bank) cut their marketing budget by 50%, and another had a client reduce their monthly fee by OVER half. Companies are spending their remaining budget on cheap,, tactical advertising, NOT big brand ads generally.

I've been out of work for two months now, but my husband works for a printing company which has just moved into bigger premises to make room for all their work, and some extra plant to cope with demand.

None of the small business owners i know are suffering, it seems to be the corporates and any of their suppliers that are facing tough times.

My sunbed lady has laid off staff but are still busy enough, my mechanic has had the best year ever and my massage therapist says there is more demand than supply. I am thinking of re-training!

i see the same things..allot of the corporate businesses are failing or struggling where as the smaller companies are doing well or picking up on business....confusing......

I had an interesting conversation with a mortgage broker who was around during the last recession, he basically said that the recession took a good two years before it struck Nz.. the bigger countries got hit first and then it trickled down to good old Nz...the ripple effect..

hopefully we can pull ourselves out of this slump before it gets worse..

[Philmc1]

Good thread
I see others are thinking the same as I am.
20 years in a very profitable business but it's really starting to bite at the moment - while sales might be holding or slightly down, business expenses have escalated in the last 12 months and we're really feeling the pinch now.
Operating on 2 less staff but wages bill is still higher than the previous 12 months, cost of raw goods has escalated along with uncontrollable fixed costs. This must eventually flow on as we will have less discretionary dollars to spend along with thousands of others and it will certainly impact down the track.
People are certainly spending on the usual recessionary items - movies, makeup, latest electronics - all a must have!!!
The Y generation or whatever it is now are still spending what they earn but soon there will be less of them working as more businesses tighten up.
In my opinion we would be silly to ignore the fact that things could get worse. Anything better will be a bonus.
As far as PI - had two tenants in well paid jobs downsize their accomodation in April due to afforadability. Not a big deal for me as the properties were immediately tenanted but cetainly a sign to me all is not well out there.

cheers
Phil