On Tuesday, we closed the month of February with the largest event we have ever hosted. Perhaps the 600 webinar signups were a reflection of the general uncertainty around inflation and continuing economic recovery globally and in the country.
To help us understand where we are now, in terms of going back to a more “normal” economy, we invited guest speaker Shane Oliver, Head of Investment Strategy and Chief Economist at AMP.
We heard from Shane around this time last year when he discussed impending threats to economic recovery. Since then, different spending patterns have emerged while inflation and interest rates continue to be a problem. His presentation picks up where we left off, providing important context to make sense of the numbers and valuable insights into where opportunities are.
Here are the 8 key takeaways:
- For Shane Oliver, a “normal” economy is defined as something more stable and less volatile, similar to what we had pre-pandemic. Have we achieved that? Not quite yet. But compared to last year, the growth outlook for this year is more positive. China’s reopening is one of the main drivers for this globally.
- The economy is slow moving. Major pain points include inflation and the skills shortage. Globally, the expectation is that growth will slow down to a 2.5% rate while in Australia, growth rate is expected to go down to 1.5%.
- Inflation rates will come down but it is important to note that the economy is more inflation prone these days. Keeping this in mind will be valuable context when planning budgets, investments and expenditure.
- In terms of consumer spending, retailers have noticed a slow down this year after seeing large spikes in spending due to the reopening of the economy after the Delta variant which is also known as “revenge” spending and tourism.
- With more baby boomers retiring and a slowdown in population growth, the skills shortage and the “War for Talent” will continue to be a problem. Paired with more pressure on consumer spending, this means more consumers and less workers to meet that demand.
- States like South Australia and Tasmania benefit from work from home setups. While we expect Queensland to gain from interstate migration. This allows for better employment opportunities across the country.
- Higher migration intake in Australia will help address the lack of talent and skills and support economic growth in the country.
- For the medium term, other recurring issues and concerns include reverse globalisation, technological innovation, decarbonisation, rising geopolitical tensions and rationalist economic policies (given a larger sized government in Australia).
The event ended with Shane giving an important piece of advice to the CFO’s in attendance. With the impending skills shortage, it’s not just about acquiring new talent. For him, it is just as important to know how to retain current talent and keep them in the company. That doesn’t necessarily mean spending more but finding creative ways to make them want to stay and grow with the company.
Final Word
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