Is the economy really that dead. ?

Maybe the part of the economy that Bayview works in is suffering , but I noticed something last weekend and had a chat to a couple of friends who work in the CBD in sydney .

Observation 1 . Military rd . No vacant shops . In the GFC , when we bought there it seemed like every 3-4 th shop was empty . Now not the case .

Observation 2 . Friends observations on their areas of the economy , financial , consulting in Sydney CBD . strong demand for work and overall buoyancy in the sectors they work in. Not booming , but people confident about the future and starting to spend.

Observation 3 . Upper property market in north shore . Almost every listing going to auction . Haven't seen that for a while .

Cliff
 
Yes it feels pretty good right now. I guess everyone is hoping china doesn't take a turn for the worst, cause that would offset any strength in our local economy many times over.
 
Not going so well in the suburbs...shops closing, businesses closing.

Montmorency which has always had a waiting list for shops to become vacant now has:

The Commonwealth Bank vacant, this was after the bank closed down in November, now available to rent.

Contours Women's Gym gone into liquidation end of January, has been there around 10 years.

The Toy Shop moved out in October, still available to rent.

The Greensborough Shopping Centre has lost Fernwood Women's gym, it closed down in December.

The closing of the gyms is partly due to the opening of the Water Marc Centre, which has fantastic pools and gym facilities.

Overall the shopping centres are much quieter, it is easier to park, which is a sure sign of a slow down in patronage.

Chris
 
^^ Rosanna appears to be ok at the moment. Has a new fancy butcher shop that appears to be doing well. At least they have my business all the time. Half the time I cannot find a park on the side of Westpac at lunch time.
 
^^^ A lot of the women from Contours, Montmorency have gone down to Rosanna Contours, as they prefer a women's gym

Some have gone to Contours, Diamond Creek

Some like me, have gone to Water Marc....over 60 its $12 a week and you can go to any of the classes, plus swim and use the gym, amazing value. I go to the gym 6 times a week, Pilates 4 times a week plus a tap dancing class :) All for $12. Thankyou Banyule Council.

Chris
 
Pilates and tap dancing! Heck yeah..

PS a pole dancing studio is opening on Burgundy street above the pharmacy/medical centre!

Also how good is Bolton street fruit & veg shop? I also love Bolton street chicken. HAHAHA.
 
I think much of the shakeout of 'small' business has already occured - started with the GFC.

I know quite a few people who walked out or sold their businesses for next to nothing, sold down taking losses (some quite large), downgraded PPOR, etc.

Almost all are back on their feet in new jobs or businesses. None went bankrupt.

I don't see this being too bad amongst the people I know now, although there is the odd business around that makes me wonder, one being the tyre shop down the road (the other shop appears reasonably busy but not as busy as before).

I think things are stagnant but confidence is holding up.
 
It seems to me that certain areas are starting to do it tough, while others are continuing on as normal.

Friends of mine on lower incomes, living in lower socio-economic areas (think Melton and the like) are finding things hard. The guys I know there are predominantly tradies - carpenters, cabinetmakers etc. - and I have noticed things getting tougher for them in recent times. Less building going on, more competition for jobs, erosion of working conditions. The jobs they find are less secure and contract jobs rather than permanent are becoming the norm. A number of engineering/fabrication businesses I know of have either closed their doors or are very very quiet compared with recent years, and these are businesses that made it through the GFC.

Add to that the constant news of this factory closing one week with the loss of 500 jobs, that factory the next with 300 or 1000, not to mention the headline grabbing closures of Ford, Holden, Toyota and the imminent announcement of Qantas laying off another few thousand next week. Naturally some of the workers being laid off will pick up their redundancy payout and walk into another job in no time, pocketing a nice little packet in the process, but an awful lot won't......
My concern is once all these jobs are gone, the associated industries having been off shored, what will we be left with? How do we pull ourselves out of the crap then when there just aren't enough jobs to be had?

On the other side of the coin, on Sydney's northern beaches things still seem to be going great guns. Shops, bars and restaurants full and of course the property market is still going crazy. In the circle I mix with people seem to be getting promotions and raises, property being bought and sold for exorbitant prices and plenty of "lifestyle purchases" being made. People don't seem to be doing it too tough up here.

Overall the whole situation seems to me to be unsustainable. How one end of the economic ladder can be doing it tough while the other is "booming" in some respects doesn't add up to me. There seems to be a lot of downward pressure on wages in all the sectors I am familiar with, while everything in life seems to be getting rapidly more expensive. Maybe it's just an illustration of the difference between the have's and have not's.

That said it's almost like a lot of people are cruising along ignorant of the cliff approaching ahead. How big that cliff is and when we will hit it is anyone's guess - predicting a crash or recession is like predicting I will die, it's a certainty, when and how are the big questions!

Hopefully I am wrong, but personally I wouldn't like to be carrying too much bad debt about now (is there ever a good time?) and would say I am wary rather than worried. That's just an amateurs opinion anyway.

BN6
 
my 2c, I think areas such as fashion, kids toys, books, and all that sort of retail is stuffed permanently, the days of having shop fronts for any of these types of business is over, mainly because you can get it for 20-40% off when ordering online which includes delivery, whether its teh "greedy" suppliers or the shop owners , I have no idea nor care, as I often go online and compare prices when I go shopping for many things,


I see department stores going in a similar way, I know Harvey Normans profits are suffering, although I did hear that david Jones and Myers's profits have increased (not sure, what caused that) but I havent stepped foot into any of them in 10years,

Unemployemnt in VIC is fairly high and most likely goign to get worse eg Toyota, Ford Closing down, along with the other big businesses that have gone

so I guess discretaionary spending seems to be down, but increased recently, I have no idea where its going??? it might be alcohol, food and gadgets and entertainmern such as concerts, movies,

overall I think the economy is not healthy but not in recession, but the media like to paint a rosy picture on it, so the property market holds up,

I think we will see the economy be fairly flat over the next 5 years,while retail continues to suffer, and probably will start to die out, except for the franchsies and niche markets, as for where the discretionary spending will go to and whether its going to go towards the economy, ie not overseas shops/suppliers, I have no idea, (someone care to tell me)
 
I work in the wholesale produce industry, and i have definitely noticed a slow down over the past few years. Everyone needs to eat, so this is one area that i believe is a good indicator of how things are looking.

The big boys are seeming to be ok, maintaining size/profits, where as the small local greengrocers are either shutting up shop, or being bought out by asian/indian families, which drastically downsize the business. The big 2 in Woolies and Coles are slowing too, focusing much more on price now as opposed to price/quality a little while back. This really screws a lot of the producers down to barely making it feasible to continue operating.

Today on Sunrise one of the economic joiurnalists mentioned that the average wage is up to about $74K p/a. This seems a large jump from the last time i heard it of around $65K a year or two ago, and about $60K from other sources i have looked into. I know of the the super high wages of some throwing out the median, but i still think that is pretty much off the mark.

Retail has taken a hit, the produce industry, building and engineering (in a lot of areas), mining - I know some financial industries may be plodding along nicely, but this is just a small percentage when you look at the grand scheme of things.
 
No matter what industry you're in, the only businesses/people who are struggling are those not keeping up with the times. Manufacturing, dated retail and hospitality are good examples.

Those keeping up with the times are making good money.
 
No matter what industry you're in, the only businesses/people who are struggling are those not keeping up with the times. Manufacturing, dated retail and hospitality are good examples.

Those keeping up with the times are making good money.

gotta agree with this, if you are competing on price u r stuffed

barriers to entry in so many business's have reduced significantly

innovation backed by service gives you the best chance of success
 
Maybe the part of the economy that Bayview works in is suffering.
Cliff
Yes, overall; our industry is down - and all the Reps I talk to confirm that - from tyre suppliers, to spare parts suppliers, to things like the company that supplies the tools and parts for tyre replacement; valves, wheel weights, puncture plugs and so on (punctures aren't in recession though ;)).

But in my workshop, we have customers from all walks of life, and a good number of folk from various industries tell me the state of play in their corner....

Workshops (and tyres) are a sort of barometer, and when the tyre suppliers are quiet, this is a sign that folks are not spending on their cars as much as they were.

It's a discretionary spend, and that spend is down...why?

Maybe some are down because folks are buying their tyres online from O/S? I don't think that is a significant market at all, and after they buy them they still have to get them fitted somewhere with a tyre changing machine.

Noone I know of is complaining of that happening; we get the very occasional one at our place.

Noone is hiring to any degree, many in the building trade are plodding, looking for more work, downsizing of staff and cutting costs etc.

It's all general - and there are always folk who are doing well in any period of time - but across the board I hear not a lot of excitement at all.

I have a mate who has the management rights to 4 golf complexes. He has been in the Golf industry as long as me, and has done very well. He moved away from working in Proshops (still does in his first one) but is moving towards the management of those facilities.

Golf is also a discretionary spend. In my life it has been a good barometer of the folks financial health in society.

He is seeing a decline in the sport across the board - not every Club or course - but generally as a sport and industry.

Memberships at Clubs are down, joining fees are non-existent at a lot of Clubs, where once it might have been a 3 year wait to get in, and a joining fee of $2k etc.

Still others are opening up their doors to allow non-members and visitors to pay greenfees and play - this was not the case previously at many of these Clubs.

Public course numbers are down across the board - why is this all happening in a sport where the media coverage of the game now is higher than it has even been in my entire life?

Not saying there isn't activity left right and centre - there is; tourism and so forth are going along...everywhere is still operating; the movie theatres, the bars, the cafes and restaurants etc - all trading...even the golf courses have players and some are very busy some of the time.

For example; Holiday Letting - I mentioned we are going to let out our joint over next summer, at a lazy $1k per night (according to the agent) and she is totally confident it will let, and they have several others which do, and are already booked - so there is money out there, and many here go; "Oh; it's beer and skittles - whaddya talkin about?" and examples like tis may deceive us all.

But you may only be seeing the pointy end of it folks and the rest is possibly without any.

But don't be fooled by little flurries of movement.

Observation 1 . Military rd . No vacant shops . In the GFC , when we bought there it seemed like every 3-4 th shop was empty . Now not the case .
What was previously in those shops - before the empty period - and what is in them now, Cliff?
 
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What was previously in those shops - before the empty period - and what is in them now, Cliff?

Mainly fashion shops , very discretionary type stuff.

Where are you based Bayview ? Maybe we talking a geographical difference .

Sydney was the first place to slow down in the last property cycle and typically is the first to take .

Bayview , I'm not discounting what is happening in you area of interest . Just trying to build up an overall picture based of somersoftland observations . I find we're quite and insightfull bunch of people . I value your opinion.

Cliff
 
What I have found with the local strip shops is:

# The vacant shops tend to work themselves out of sight.
# Seeing more churn, so the place might look full but the businesses keep changing.
# Seeing higher percentage of food shops (cafe's, takeaway, etc). Which is possibly a race to the bottom (how many bread shops, cafe's, etc. can you support in a small strip).

I guess some of the holes have been created by loss of hardware shop, multiple banks, clothes shops.

In terms of industrial area's:
# In Sydney we seem to be losing a lot of the industrial base via rezonings to residential. Rhodes, Wentworth Point, Zetland, Mascot, Green Square, etc.. just to name a few.

A lot of whats left seems to have been re-purposed as warehouse/distribution space. The only new construction seems to be this too. This requires less workers and because all the stuff is coming from overseas, there is no cross-business created with the other local businesses.
 
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