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Economic recovery

Discussion in 'The Bar' started by keys, May 2, 2020.

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  1. keys United Kingdom

    keys Well-Known Member Full Member

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    Previous thread locked by Admin, maybe not hard to guess why.

    Release from restrictions is on the horizon. In addition to job losses already, several companies are announcing redundancies by the end of furlough. The largest that I have seen is 12,000 at BA, which is approaching a third of their workforce.

    I wonder what consumer confidence or behaviour will be like as businesses try to resume trading. Likely to be oversupply and weak demand in many sectors such as leisure, travel and retail shops. In other areas I would expect limited supply of manufactured products from countries badly affected by Covid, especially China.

    I expect solicitors, estate agents, debt collectors and others will see a surge in work.
     
  2. Domain Forum

    Acorn Domains Elite Member

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  3. Trauiner United Kingdom

    Trauiner Active Member

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    I don't see there being much difference on the consumer side of things. People will always spend money on something they want. There's hasn't (at present at least) been a mass loss of jobs in the sense that it would affect the economy on a large scale.

    On the business side of things, I don't expect much change apart from a lot of businesses just focusing on breaking even, rather than focusing on profits for a while.

    It's not all bad as I think companies have questioned a lot of things they do and will adapt to cut costs for the future. (IE; Do we really need a £300k office space when all of our staff worked from home perfectly fine? Do we really need to send a staff member on a 4 hour trip to London to speak to a client when we can do it over video conferencing?)

    Customers will maybe have longer wait times for things but I feel they're somewhat 'trained' on that because of the current lockdown anyway. Waiting an extra 1-2 months for their new leased car will not bother them as much as it would have a few months back.
     
    Last edited: May 2, 2020
  4. newguy United Kingdom

    newguy Well-Known Member

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    I think it's a bit of a double whammy of opening up slowly and many (especially elderly) people still being scared to be in busy environments that might be difficult to move beyond with any haste. I guess in part it depends on how fast it starts to spread again when we open up. If it can be kept at least somewhat under control and mask wearing becomes the norm, that would give people a bit more confidence.
     
  5. WalkinDude United Kingdom

    WalkinDude Active Member

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    The economy is a measure of kinetic activity.

    Work from home utopia is no substitue to Bars, cafes, car washes, public transport, restaurants, pubs, Dry Cleaners, fashion retailers and so much more who are dependent on commuters and the rush hours.

    Business via video conferencing is a poor substitute for face to face where in the latter a broader range of opportunities can be proposed than online.

    The pandemic is the enemy of fast paced economic action.

    Seems folly to me to suggest anything other than a limiting factor to its spread or rates of fatality will prevent devastating economic consequences for huge swathes of society.

    Well paid white collar careers that can work from home are only insulated in the medium term.

    If the far larger group of kinetic workers. I.e people who dont sit behind a screen all day, builders, chefs, entertainers etc, are not urgently returned to work the middle classes whos economy depends on them will be next.

    Then theres infrastructure. These giant office blocks dont work at 25% occupancy. If they tank they will take the housing market with them.

    The economy isnt designed to ever shut down. Every avenue of efficiency has been exploited and very little surplus ever exists except in the cayman islands.

    The world is staring at 40% GDP decline, 20% unemployment in the age of Austerity, Political fake news fueled turmoil, and asset values falling off a cliff cos it isnt valuable if it isnt being used... bit like outer space.

    The top tech companies are dependent on ostentatious spending. Those youtube vids and insta selfies, GQ linkedin profiles dont fund themselves. Nor can they be replaced like for GDP like with clap for the NHS every thurs vids.

    I doubt it will get this far but if medical community dont perform another fast miracle then at the top they gonna have to decide between the economy i.e all of us and peoples lives.

    Im grateful to be a domainer.
     
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    Last edited: May 2, 2020
  6. newguy United Kingdom

    newguy Well-Known Member

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    Interesting thoughts. I can very much see how the wheels might come off, and agree with your point that the economy isn't at all suited to simply stopping in its tracks. I do think the modern option of many (but far from all) being able to work from home has been a bit of a God send for some during this time, but appreciate that there are many other parts of the economic puzzle.

    I'm coming around to the idea that if things open up gradually, a second lockdown if numbers go up again, might be the nail in the coffin of the economy for the short term. There's a lot we don't know about how many people have had this. There's talk of around 25% of those in some areas of New York having antibodies for instance. Maybe once these places open again, with the increasing capacity in hospitals there is a case to be made for trying to blast through it. If a point is reached where numbers drop off due to herd immunity people will start to feel a bit less unnerved by the outside world!

    Hopefully improved treatment options or a vaccine might also play a meaningful part in overcoming this virus.
     
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  7. Ben Thomas

    Ben Thomas Well-Known Member

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    I think eCommerce will see a rise. People who previously hadn't invested so much in eCommerce as they had a brick and mortar storefront will now see they need to have eCommerce as a contingency plan, does anybody agree? Because I'm going to need to adjust my business model if so.
     
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  8. poetry

    poetry Active Member Full Member

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    I’ve always been big on the supermarket/amazon side of domain product business. I thought I would make a good portfolio sale this year to one of the big chains as collection goes back to 1999. However the demand has so increased that it is difficult time to market. Although medium term prospects for digital/ essential sector is good other sectors will get knocked heavily and most mainstream economists are predicting recession
     
  9. keys United Kingdom

    keys Well-Known Member Full Member

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    It seemed impossible, yet inevitable, that one day the bubble of relentless rising property prices in London and other major cities, would burst. I think it is already happening, but we can't see the data yet. This will hit several tax revenues related to property. Stamp duty is a share of almost every property sale - expect fewer sales and lower prices.

    Michael O'Leary (boss of Ryanair) says social distancing on aircraft is just not viable financially. The same applies in many other settings. We will have to rely on face masks and other measures to reduce risk in close proximity to other people. There are many people following government guidelines because they fear being infected or infecting others, to the extent that they will need equally convincing assurance from experts, that it is safe to venture out.

    Coming months will be challenging for occupations where close contact is unavoidable, such as dentists, hairdressers, opticians etc. For others, necessity has shown that much can be done working mainly from home. Technology to enhance this capacity will be in demand, and it may change the way businesses operate.

    There is a news clip titled the "ostrich alliance" about a few national leaders who still dismiss Covid as a storm in a teacup, or simply do not care. There are others who seem to share this view, to a lesser extent. You could argue that Nightingale hospitals were an overreaction and waste of resources, or prudent insurance that we have fortunately not yet needed.

    It beggars belief to see armed Americans protesting that their freedom takes precedence over all else. Being very cautious is a difficult policy to manage, but the consequences of failed efforts will be far worse. It is still hard to accept the apparent slow motion of change and effect. Many years ago an engineer from a supertanker told me that if two of these vessels were on a collision course, by the time they had line of sight, however far away, it was too late to avert disaster.

    The severity of economic decline is near impossible to assess at this stage, and will vary according to success of government measures. If there is recession, it seems likely that everyone will take a number of steps backwards and for some there looms a long slippery slope.
     
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  10. diablo

    diablo Well-Known Member

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    I think you're correct.

    House prices are heavily linked to interest rates: both in terms of how much people can pay (borrow) and where money ends up when interest rates are kept artificially low (as they have been for two decades now). This has created today's housing bubble.

    Given the massive amount of money injected into the economy this year, it is only a matter of time before interest rates rise and this and other bubbles burst.

    A rise in interest rates will also spell the end of zombie businesses that have kept going on cheap money. This economic hit will affect jobs and also house prices.

    Covid19 is the perfect fall guy, covering up decades of government(s) mismanagement of the economy.
     
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    Last edited: May 3, 2020
  11. martin-s United Kingdom

    martin-s Well-Known Member

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    That might be true, but there's a risk that summer will give us a false sense of security and that another wave could happen when winter hits.
     
  12. newguy United Kingdom

    newguy Well-Known Member

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    That's true, many have predicted a second wave that's as bad if not worse than the first.I really hope that's not the case, but who knows. If it is I'd have to hope that after that enough people may have built up immunity, or sadly succumbed to this that we'll have experienced the worst of it. We really have to hope that people do not get complacent in say social distancing and mask wearing for the time being, and also that treatments quickly improve to the extent that people are better able to get over the virus.
     
  13. Trauiner United Kingdom

    Trauiner Active Member

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    There is still a generation of business owners that believe that the high street is dead purely because of councils, the government and greedy landlords, rather than realising how much eCommerce just makes much more sense this day in age.
     
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  14. keys United Kingdom

    keys Well-Known Member Full Member

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    Put another way, operate online as the main/preferred setting where it is practical to do so. Have a supporting physical retail outlet if necessary. I recently had a quote for an electric garage door, suppliers wanted a definite order before they would make a showroom appointment - guess why.

    Current restrictions and closures present a huge cost and inconvenience. Looking at the source and circumstances of Covid makes similar future experiences a real possibility, but next time the government safety net could be much smaller.

    Stay home, has forced people to shop online for anything and everything that can be delivered. There are limits, but I see big potential growth for transport logistics and delivery services.
     
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  15. stender United Kingdom

    stender Well-Known Member

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    I work for a large city company where most of it has been working from home for a while now. Having seen how well it's been working we are now looking at resources based in high cost locations such as London, New York etc and looking to reduce the headcount in place of low cost locations. We hot desk already meaning less seats required but now looking to actually close some buildings. I can only assume other companies are doing the same and can see massive repercussions. Firstly my job ends up in India. Secondly all the shops and restaurants near my work buildings will be impacted by reduced customers.
    The thing with working from home where possible is do you trust your staff or do you monitor them? We had software on users pc's which monitored and reported on what they were actually doing but this resulted in a backlash. From an employee perspective you don't want to be spied on but from an employer perspective I dont want to be paying my staff to mow their lawns. The outlook isn't great and if I still have a job in 12 months time and assuming we have a vaccine, I will be paying a lot more tax and pension not worth a fraction of what it was.
     
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  16. Ben Thomas

    Ben Thomas Well-Known Member

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    You’d obviously have to integrate some sort of time/project tracker with people working at home. I was going to start remote hiring employees last year instead of hiring in physical office, but again like you say, how do you police them?
     
  17. keys United Kingdom

    keys Well-Known Member Full Member

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    I am sure HMRC would have an answer. They require records to be kept for purchases, sales, expenses, travel etc. Applying this to remote employees, would you not expect them to keep a record of how they use x hours per day of company time.

    In practice, some people are well suited to using their own initiative, and others need supervision. It is easy to overlook a key benefit of working from home, time and money saved by not having the daily commute. The freedom of flexible hours is another bonus, but sufficient work must be completed.
     
  18. stender United Kingdom

    stender Well-Known Member

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    yes you save money on travel but it means i have the heating on all day, multiple electrics and worst of all the fridge is only 10 seconds away.
    Re software we had some rolled out called sapience. It was promoted to employees as a tool to 'help you manage your workload' rather than big brother. It did have limitations though. I suppose it depends what you do as to tracking. If someone is on a helpdesk then they have to be picking up calls right away so easily measurable.

    I liked that one guy said 'it's all good the government forcing me to work from home but i've run out of rooms to tarmac'
     
  19. WalkinDude United Kingdom

    WalkinDude Active Member

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    Globalisation = race to the bottom. Read sometime ago in China there are 500 million people of school to Uni age raised as such that a 12hr study or working day is bog standard and better educated [if you count passing exams as an education] than Western Kids. Then there's India.

    So lets say Europe and North America embark on a work from home revolution. Perfect it infact. Software and Hardware companies develop the means to make it all work. Logistics companies develop the means everything is where it needs to be. Within 5 mins of all this being developed shareholders will simply conclude the same work can be done using the same system in China and India plus other regions. Now this sounds familiar.

    We've had 30 years of Western Politicians facilitating globalisation then accusing China and co of Intellectual Property theft with the truth being closer to the West just handing it all over on a plate for immediate shareholder gain. And with that went solid paying blue collar work for the average joe or joanna. Gone. Cheerio thanks for the memories. I grew up with the Fortune 500 being topped by General Motors, Ford, General Electric, IBM etc. I now live in a world where Instagram will be worth trillion dollars soon enough.

    Work from Home is the day of reckoning for Western White Collar workers who did nothing when same happened to blue collar workers last 30 years and in fact White Collar workers voted election after election for blue collar wipeout.

    What 15 years ago a dude working for a top Tech firm on 100k a year [15 years ago], was caught hiring Chinese technicians to do his job. He simply handed them his logins paid them 30k a year and went golfing most days. He argued in court there was nothing in his employment contract that prevented this. The tech company [my memory isn't flawless on this story], argued he gave access to data worth 'hundres of millions' to still yet unknown parties.

    This was 15 years ago. He went to jail I think. WorkfromHome is as such good news if you happen to be a commercial lawyer or litigator going forward.

    Anything Investment Banks agree is a good idea should be treated with immediate suspicion by society. Elysium beckons and they can't wait for it.
     
  20. stender United Kingdom

    stender Well-Known Member

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    A lot of people, myself included always said we had to be near the business and have meetings with them etc so had to be London based. Having worked from home for 6 weeks (and 3 days a week before covid) it's clear I don't need to be. That's why im back here after years asking the same questions and still looking for a business to startup as some security.
     
  21. Siusaidh United Kingdom

    Siusaidh Moderator Staff Member

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    My partner usually works from an office with about 20 colleagues.

    They now realise they can do it all from home.

    I wonder what price office space in the coming year?
     
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