Download - The post-crises world or, the new normal
Collision Repair Association Conference – 190413slide 1
The post-crises worldor, the new normal
presentation to
Collision Repair Association 2013 Conference
Dr Ganesh NanaChief Economist
Business and Economic Research Ltd
19 April 2013
Collision Repair Association Conference – 190413slide 2
The new normal• which two economies had a 60% share
of the world economy 2000 years ago?• which two economies still had a half
share in the world economy in 1820?
old
Collision Repair Association Conference – 190413slide 3
The debt crisis in a nutshell
the gaps between earning and
spending
NB: its about nations, not governments
-500 -400 -300 -200 -100 0 100 200 300
United StatesSpain
ItalyAustralia
IndiaBrazil
FranceIndonesia
Hong KongThailandMalaysia
KoreaSingapore
TaiwanNetherlands
NorwaySwitzerland
JapanGermany
China US$bn
Collision Repair Association Conference – 190413slide 4
Austerity is underway– but cost is high
4
6
8
10
12
Feb 01 Feb 05 Feb 09 Feb 13
% Unemployment in EU% of labour force
Collision Repair Association Conference – 190413slide 5
At least US heading in right direction
3
6
9
12
Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Feb 13
%Unemployment in US
% of labour force
Collision Repair Association Conference – 190413slide 6
As global economic engine splutters
0
3
6
9
12
15
Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12
%pa
MOSPI; National Bureau of Statistics of China
GDP growth% change on previous year
India China
Collision Repair Association Conference – 190413slide 7
But our neighbours are good mates
0
1
2
3
4
5
6
Dec 02 Dec 04 Dec 06 Dec 08 Dec 10 Dec 12
%pa
Australian Bureau of Statistics
Australian GDP growthannual % change
Collision Repair Association Conference – 190413slide 9
Business environment remains tough
-8
-4
0
4
8
12
16
Agriculture Business Households
%Change in sector credit
Jan 2013 cf Jan 2009
Collision Repair Association Conference – 190413slide 10
As banks restore their reserves
4
5
6
7
8
9
Jan 05 Jan 07 Jan 09 Jan 11 Jan 13
%Banking sector balance sheet
reserves as % of total liabilities
Collision Repair Association Conference – 190413slide 11
So business investment remains subdued
2.0
2.5
3.0
3.5
4.0
Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13
milion m2
Non-residential building consents12-month total area
Collision Repair Association Conference – 190413slide 12
At least house building recovery is underway
10
15
20
25
30
Jan 07 Jan 09 Jan 11 Jan 13
000sNew house consents
12-month totals
Collision Repair Association Conference – 190413slide 13
while consumers remain cautious
0
4
8
12
Feb 07 Feb 09 Feb 11 Feb 13
%Electronic card transaction values
12-month % change on year earlier
Collision Repair Association Conference – 190413slide 14
... but, are still spending
0
4
8
12
Feb 07 Feb 09 Feb 11 Feb 13
%Electronic card transaction values
12-month % change on year earlier
MV sector excl fuel
Collision Repair Association Conference – 190413slide 15
Motor - challenges
100
150
200
250
Feb 05 Feb 07 Feb 09 Feb 11 Feb 13
000sMotor vehicle registrations
annnualised totals
Collision Repair Association Conference – 190413slide 16
• legislative* safety (older vehicles?)* environmental standards* WOF changes
• household income pressures• roading investment pressures• public transport options
Motor - challenges
Collision Repair Association Conference – 190413slide 17
Business size in motor industry
0%
20%
40%
60%
80%
100%
Motor
Composition of motor industry
10+ employees
6 to 9 employees
1 to 5 employees
self-employed
Collision Repair Association Conference – 190413slide 18
With a few good stories
0
3
6
9
12
15
Jan 04 Jan 07 Jan 10 Jan 13
$bn
Statistics NZ
Dairy export receipts12-month totals
Collision Repair Association Conference – 190413slide 19
Another promising story
0
1
2
3
Jan 04 Jan 07 Jan 10 Jan 13
$bn
Forestry export receiptsannualised totals
Collision Repair Association Conference – 190413slide 20
… and another …
0.0
0.5
1.0
1.5
Jan 04 Jan 07 Jan 10 Jan 13
$bn
Wine export receipts12-month totals
Collision Repair Association Conference – 190413slide 21
Next to an average story …
3
4
5
6
Jan 04 Jan 07 Jan 10 Jan 13
$bnMeat export receipts
12-month totals
Collision Repair Association Conference – 190413slide 22
4
5
6
7
8
Sep 03 Sep 06 Sep 09 Sep 12
$bn
Statistics NZ; BERL calcs
Tourism export revenuesannualised totals
Or, a not so good story
Collision Repair Association Conference – 190413slide 23
But, our houses are worth more
150
200
250
300
350
400
Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13
$000s
REINZ
Median house sale price3-month average
Collision Repair Association Conference – 190413slide 24
And so are our Kiwi dollars!
45
52
59
66
73
80
Feb 01 Feb 04 Feb 07 Feb 10 Feb 13
IndexNZ$ TWI exchange rate
monthly average
Collision Repair Association Conference – 190413slide 25
So export sector struggles
20
30
40
50
Jan 04 Jan 07 Jan 10 Jan 13
$bn
Merchandise export receipts12-month totals
Collision Repair Association Conference – 190413slide 26
As our Achilles Heel imposes more pain
NZ debt in Sep 2008 = $149.9bn
NZ debt in Sep 2012 = $148.8bn
Progress in rebalancing NZ economy
-16
-12
-8
-4
0
4
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
% of GDP Current account balance of BoPas % of GDP
Collision Repair Association Conference – 190413slide 27
The hard yards ahead …“Looking beyond our present circumstances, our future depends on our ability to export.”
Budget Speech, June 1978
Collision Repair Association Conference – 190413slide 28
Economics is …
liquidityswap rates
house pricesinterest rates
inflationleverage
debthedge funds
ratings
Collision Repair Association Conference – 190413slide 29
A lesson in rocket scienceor Economics 101
wealthcreation
investmentspending
resourcedevelopment
exportincome
Collision Repair Association Conference – 190413slide 30
Challenges in the ‘new’ normal• climate change• energy (& related raw materials)• water• food• skilled labour
making
new ‘friends’
or
‘relationships’
Collision Repair Association Conference – 190413slide 31
So, (when/how) will it end?
Collision Repair Association Conference – 190413slide 32
NZ 2002 population
144151157
145132
124141
148148
132122
9882
6458
4324
114
138142
150140
131131
154158156
136123
10085
6863
5540
2412
200 150 100 50 0 50 100 150 200
Under 55–9
10–1415–1920–2425–2930–3435–3940–4445–4950–5455–5960–6465–6970–7475–7980–8485–89
90+
000s
females males
man drought
Collision Repair Association Conference – 190413slide 33
NZ 2012 population
161148148
161171
149134135
149152
147128
11692
7250
3719
8
152141142
152159
149143
148164163
156134
12197
7958
4731
18
200 150 100 50 0 50 100 150 200
Under 55–9
10–1415–1920–2425–2930–3435–3940–4445–4950–5455–5960–6465–6970–7475–7980–8485–89
90+
000s
females males
but the next 25 yrs ???