Moir Recruitment News

Last month, Moir Group had the pleasure of hosting Su-Lin Ong, Managing Director of RBC Capital Markets and Head of Economics & Fixed Income Strategy (Australia/NZ).  The topic was “The Financial Year Ahead, The Challenges And Opportunities For The Australian And The Global Economy.”

Su-Lin started by saying that she is typically “glass half empty”. Given this and what she went on to say my conclusion was that the global and Australian economies are doing okay. 

Global Economy

The global developed economies are much better than they have been for a number of years and Australia is muddling along.

The US economy is strong, with almost full employment. The Greek situation is not really that relevant to Europe and it will have a very minimal impact on Europe if they default. Europe in the main is doing a lot better, and China is a worry as the Chinese economy is slowing more than expected.

Australian Economy

In many ways the Australian economy is muddling along and hasn’t changed much for a number of years.

2 Factors are driving the Australian economy:

1) Decline in mining investment

2) Decline in commodity prices

Very weak non mining capex investment. Businesses are not investing or spending that much and there is a lack of business confidence, mainly due to the lack of leadership at a federal level. Federally nothing is really happening. Lower terms of trade equals lower national income.

Housing is the consistent bright spot in the Australian economy. Housing prices in NSW will continue to rise, just not at the same level as the last 12 months.  Su Lin was reasonably positive around property and cautious around consumer confidence.

Households are starting to dip into savings, this is because wages growth is only a little above 2%.

There is scope for the RBA to cut rates by the end of this year and into 2016 and there could be one more rate cut. They want to keep the currency low. Tourism and education are responding very well to lower rates.

RBC do not put a lot of weight on official labour rate data. Construction & professional services are strong in employment and Mining continues to shed jobs.

NSW:

NSW is a much more diversified state, in terms of industries. NSW is far outperforming the rest of Australia and VIC is doing okay as it is reasonably diverse. WA and QLD are struggling as they are very reliant on mining.

Looking forward - The Fiscal Headwinds

1) Government expenditure is running at 26%. This is high. At some stage it needs to be reigned in. It can’t persist. “Little urgency breeds complacency”

2) Adjustment in wages. Uncompetitive on the labour cost front.

3) Household debt still heading in the wrong direction

4) Can productivity be maintained, it has seen a definite improvement.

So given Su-Lin’s glass “half empty” comment, I think most of us ended the presentation feeling reasonably optimistic about the short term outlook at least.

Thank you to everyone who came along to this event. If you would like a copy of presentation from the day, please click on this link, and for details on our upcoming Moir Group events, please visit our Event Page.

"Where To Next In The Australian Retail Market And How Should You Respond?" A Post Event Summary on Trent Duvall's Presentation by Emma Walsh, Business Manager, Moir Group 

Moir Group recently had the pleasure of hosting Trent Duvall, National Leader of Consumer Products at KPMG on “Where To Next In The Australian Retail Market And How Should You Respond?”. Trent’s portfolio in Australia encompasses Food & Beverage, Consumer Products and Agribusiness.  Trent is also a member of the global Consumer Markets practice and provided us with robust commentary and insights into the rapidly changing retail marketplace. 

 Some key points from the day include;

• Growth within the retail market has been in the categories of electronics and hardware. Other categories performing well are furniture, takeaway foods, footwear and personal accessories.
• Compared with other western countries Australia has performed well due to growing levels of wealth and strong GDP growth. Australia is viewed internationally as a good place to do business and with an increased number of businesses starting in Australia.
• The consumer has fundamentally been changed through technology. The new consumer is a creator, critic, producer, spectator, and community manager, and is always on!
• The way we shop for good and services has rapidly changed as we embrace online shopping. Bricks and mortar is here to stay but will evolve and savvy retailers are embracing innovations to create an interactive and seamless shopping experience. Some very futuristic and innovative shopping experiences are being piloted each day.
• Retailers are focusing heavily on inventory and fulfilment management as well as data analytics and security. There is consumer demand for increased speed, service and delivery flexibility to enhance the whole retail experience.  We are seeing a lot more “click and collect” delivery options and with the emergence of in-home enablers such as Amazon Dash and Mobile Wallet, the future is coming! 

Thank you to everyone who came along to this event. If you would like a copy of presentation from the day, please click on this link, and for details on our upcoming Moir Group events, please visit our Event Page.

“Australian Property: Where to next?" Reflections on Steve Gatt's Presentation by Karen Ryan, Director, Moir Group

This week Moir Group was delighted to host an event where 80 plus of our clients and candidates joined us to listen to the wise words of Steve Gatt, a highly accredited and experienced Partner of the Real Estate and Construction Practice from KPMG.

Steve shared with us his many insights into the property market both locally and overseas, and spoke about international and local investors in both the retail and commercial property markets.

As Steve had spoken with us in 2014, he firstly re-capped on a few of his predictions.  Some had come to fruition, such as shopping centre tenancy becoming more focussed on service tenants, which is positive as the retail mix always changes. The recommendation that 2014 was a good time to renegotiate rents was also realised, as rents are starting to rise and vacancies  fall. There are still opportunities to re negotiate, however there are not as many offers and incentives from landlords. 

The economy does influence the property market and risk cycles  Whilst there is rising unemployment, consumer sentiment seems neutral and even though confidence  is slightly uncertain for businesses, it is a relatively good environment for property investment. 

The reserve bank  has a dilemma and juggling act where they want to influence the AUD so they can control imports and exports and manage the impact on the property industry.  They had to lower the rates recently and one reason was in reaction to Canada lowering their rates, so the dollar didn’t rise too much, even though this then fuelled the property industry.  This will always be an ongoing balance and a challenge.

Steve spoke a lot about foreign investment in Australian property both institutional and residential.  Institutional investment has gone from 18 billion to 28.2 billion in the last year.  1/3 of all this was foreign and 38% of that from China.  Chinese are investing in Australian property for many reasons including yields over 4 % compared to lower yields and more barriers in China, and rents are rising here too. Part of the reason Sydney international residential investment is increasing is due to special and premium investment visas, giving guaranteed residency to overseas investors if they invest $5-15 million.  In 2014 over 4 billion was invested in residential property by the Chinese and from 2009 – 2013 – the total was less than 4 billion, so this is a huge increase. 

Sydney is now the third least affordable place to live falling just under HK and Vancouver and not to scare us, but he said after Vancouver had all the foreign investment, no locals could afford to live there any more and there was a lot of out cry and unrest from locals towards the government.  However this is not too much of a worry for us as our population growth outpaces supply so we need new property and investment from overseas and will still have the capacity to fill all the places investment is creating.

If people talk too much about the increased prices, investments might slow down. This could go against us and “kill the golden goose”. To make us feel better, $1 million in Sydney buys you 41 square metres compared to 17 sqm in Monaco, 20 sqm in HK and 21 in London, and in Melbourne 117 sqm.

It seems Melbourne is likely to over take Sydney as a population centre by 2050, and Perth will take over Brisbane sooner than that. Melbourne is going to be the place to be for businesses and consumers in the future.

It was a great presentation with many more issues covered and interesting things to think about and focus on.  Whether you came to hear an institutional, commercial point of view or from a more personal residential property investment decision perspective, Steve definitely gave us all lots of information and things to think about and to watch out for over the coming year and into the future.   

Thanks everyone who came along. Steve's most important message of the day was a message from his mum.  When is the best time to buy property?  All the time! 

To find out more about our other upcoming events, visit our events page and to stay up to date, like us on Facebook and Twitter  or follow our company page on LinkedIn.

At our recent Moir Group event held in North Ryde, JP Morgan’s Chief Economist Stephen Walters gave his perspective on the challenges and opportunities facing the Australian and the global economy in 2015. Despite how he was quoted in the media during the previous week, Stephen was positive about the outlook for the Australian economy for the coming year. 

In particular Stephen Walters highlighted

• Australia’s low level of government gross debt as a % of GDP, relative to OECD average (significantly higher)
• Australia’s benign inflation forecasts and cooling wages growth
• Ongoing low interest rates
• Domestic tourism sector’s likely growth, benefiting from the lower AUD
• Continued rising house prices, leading to higher construction rates

Stephen did note the following areas of caution for the year ahead

• The lack of consumer and business confidence
• The lack of productivity growth
• Rising unemployment rates (Australia is now slightly higher than the US in this measure)

From a global perspective, Stephen noted some ongoing uncertainties, especially in Greece, and noted that in 2015 the Australian economy may be impacted by changes in US interest rates.  

Concluding on a positive note, Stephen felt that if Australia is able to address the challenges of  productivity growth, consumer and business confidence, the economy will be well positioned for growth in the coming 12 months.

If you are interested in hearing another view on the nation’s economic outlook for 2015, see our short interview with David McDonald, Chief Investment Strategist, Australia  - Credit Suisse

To find out more about our other upcoming events, visit our events page

Newton Soares, Moir Group's Business Manager, Banking and Financial Services

Read Newton's reflections on David McDonald's speech .  David is the Chief Investment Strategist, Australia at Credit Suisse AG and spoke at our Moir Group event last week on "Challenges facing the Australian and global economy in 2015".

"Listening to David McDonald's views on the challenges our economy is facing certainly highlighted many positives for the year ahead. What I took away was that the key driver behind the economy is having a “happy nation” i.e. If you are happy, you spend more, businesses increase revenue, expand, hire more people and this drives the economy.

What unfortunately is preventing us from “being happy” is a “lack of consumer & business confidence”. It is confusing, when Australia is in a much healthier position than most of the world.

David compared us to Continental Europe with double digit unemployment, interest rates below 1%, lack of growth and serious regional issues in Russia & Ukraine.

David highlighted that in Australia we have relatively low unemployment rates, our houses have all increased in value and our economy is still growing at a faster rate than most developed countries. 

He also noted the significant drop in petrol prices, effectively equivalent to a tax cut, and a further reduction in interest rates by the RBA mean we should have more disposable income. I am sure most people in Continental Europe would love to swap places with us without a second thought.

So the question is, what is creating the lack of consumer & business confidence?

At the Commonwealth Bank's recent HY Profit announcement, CEO Ian Narev made reference to the Federal government needing to have a clearer plan that is clearly communicated.  He commented:

"Businesses need the certainty to invest to create jobs, and households need a greater feeling of security. That requires implementation of a coherent long-term plan that clearly addresses target government debt levels and time-frames, infrastructure priorities, foreign investment, business competitiveness policies and, above all, job creation."

I’ve always used recruitment as an indicator of how the economy is travelling.  When the economy is poor, recruitment volumes drop and head count freezes are common.  We haven’t seen any of this at Moir Group.  As accounting recruitment specialists we had a record 2014 revenue year and January 2015 has been exceptionally busy.

In summary, I walked away from David’s presentation with optimism and renewed belief that we are in a strong position for growth.  I remain positive about the year ahead."

If you are interested in this topic, Stephen Walters, Chief Economist at JP Morgan will speak on the same theme at our North Ryde event this Thursday.  Limited tickets still available. Register on our events page