Who would have thought...
http://www.smh.com.au/news/national/200000-jobs-to-go/2008/10/18/1223750399529.html
200,000 jobs to go as businesses hit wall
Mathew Benns
October 19, 2008
AT LEAST 200,000 more Australians will be out of work by the end of next year as the effect of the world financial meltdown takes hold, economic experts have predicted.
There are also fears the uncertainty over jobs could lead to a quiet Christmas in the retail sector, with Australians cutting back on spending and seeking bargains on the internet.
"There will be less presents under the tree this year," said National Australia Bank chief economist Alan Oster. "I would expect October into December to be lousy but there is a lift because the Government [will drop] helicopter loads of money over people in December.
"Despite this I think Christmas is going to be a lot slower and weaker and then it will continue getting weaker into next year."
NAB economists predict growth will drop to just 1.25 per cent by the middle of next year with an interest rate cut to 4.5 per cent and unemployment at about 6 per cent by the end of the year, meaning 200,000 more people will be out of work.
But NSW Business Chamber spokesman Nigel Blunden said: "The people of NSW are remarkably resilient, particularly at that time of year."
The chamber represents 30,000 businesses across the state. "A lot of those are feeling the effects of the downturn but we are hoping the interest rate cut and Federal Government payments will inject confidence into consumers."
Mr Blunden said businesses were hoping people would choose to spend the extra cash rather than save it. "Retail spending over the four to six weeks leading up to Christmas is very important to our members."
Many Christmas bargain hunters are expected to turn to the internet as they try to save money. A spokesman for eBay, Daniel Feiler, said: "It is hard to predict what will happen in this economic climate. People will still be buying presents for Christmas and will be looking to make their dollar go further.
"Our research shows e-commerce is 25 per cent cheaper than retail because the sellers can pass on the savings from things like rent and electricity to the buyers."
But eBay itself has not been immune to the economic fallout, announcing 1000 job cuts around the world including 18 in Australia.
Professor Guay Lim, from the Melbourne Institute for Applied Economic and Social Research, said problems would arise if people decided to save rather than spend. "Job uncertainty means that people will be concerned over Christmas. Our indicators show that people are starting to save, which is not something we have seen in a long time.
"The Government wants us to keep spending on essentials but not on luxury imported goods. People need to maintain a level of spending and buying Christmas presents. We cannot save excessively because the economy will go into a tailspin."
Professor Lim said Australia was protected from the worst of the fallout by the Government's stimulus package, interest rate cuts and a boost in exports caused by the fall in the value of the Australian dollar.
"We expect slow growth and an increase in unemployment. We think unemployment will go up a notch to 4.8 per cent or 5 per cent by the middle of next year."
CommSec economist Craig James was optimistic about the future. "In Australia, things are not so bad. Unemployment will creep up but it's rising from the lowest level we have seen for a generation. Our economy is in the strongest shape to weather a storm, which is something we have not been able to say in the past."
http://www.smh.com.au/news/national/200000-jobs-to-go/2008/10/18/1223750399529.html
200,000 jobs to go as businesses hit wall
Mathew Benns
October 19, 2008
AT LEAST 200,000 more Australians will be out of work by the end of next year as the effect of the world financial meltdown takes hold, economic experts have predicted.
There are also fears the uncertainty over jobs could lead to a quiet Christmas in the retail sector, with Australians cutting back on spending and seeking bargains on the internet.
"There will be less presents under the tree this year," said National Australia Bank chief economist Alan Oster. "I would expect October into December to be lousy but there is a lift because the Government [will drop] helicopter loads of money over people in December.
"Despite this I think Christmas is going to be a lot slower and weaker and then it will continue getting weaker into next year."
NAB economists predict growth will drop to just 1.25 per cent by the middle of next year with an interest rate cut to 4.5 per cent and unemployment at about 6 per cent by the end of the year, meaning 200,000 more people will be out of work.
But NSW Business Chamber spokesman Nigel Blunden said: "The people of NSW are remarkably resilient, particularly at that time of year."
The chamber represents 30,000 businesses across the state. "A lot of those are feeling the effects of the downturn but we are hoping the interest rate cut and Federal Government payments will inject confidence into consumers."
Mr Blunden said businesses were hoping people would choose to spend the extra cash rather than save it. "Retail spending over the four to six weeks leading up to Christmas is very important to our members."
Many Christmas bargain hunters are expected to turn to the internet as they try to save money. A spokesman for eBay, Daniel Feiler, said: "It is hard to predict what will happen in this economic climate. People will still be buying presents for Christmas and will be looking to make their dollar go further.
"Our research shows e-commerce is 25 per cent cheaper than retail because the sellers can pass on the savings from things like rent and electricity to the buyers."
But eBay itself has not been immune to the economic fallout, announcing 1000 job cuts around the world including 18 in Australia.
Professor Guay Lim, from the Melbourne Institute for Applied Economic and Social Research, said problems would arise if people decided to save rather than spend. "Job uncertainty means that people will be concerned over Christmas. Our indicators show that people are starting to save, which is not something we have seen in a long time.
"The Government wants us to keep spending on essentials but not on luxury imported goods. People need to maintain a level of spending and buying Christmas presents. We cannot save excessively because the economy will go into a tailspin."
Professor Lim said Australia was protected from the worst of the fallout by the Government's stimulus package, interest rate cuts and a boost in exports caused by the fall in the value of the Australian dollar.
"We expect slow growth and an increase in unemployment. We think unemployment will go up a notch to 4.8 per cent or 5 per cent by the middle of next year."
CommSec economist Craig James was optimistic about the future. "In Australia, things are not so bad. Unemployment will creep up but it's rising from the lowest level we have seen for a generation. Our economy is in the strongest shape to weather a storm, which is something we have not been able to say in the past."
