I have picked six topics worthy of review as they will all have some effect on your business this year.
Will the Government last? In my view there is only one answer and that has to be yes it will. There will be difficulties but then there always are so that is nothing new. I am very confident it will go the three years. The loss of power and importance which would be felt by any minor party disrupting the arrangement will ensure that all concerned will compromise and go the distance.
If I am wrong and there is a break down then it will be excellent news for the printing industry which will have to deal with the extra work load from an election.
State of the economy. I follow economic matters quite closely and have good contacts in smaller firms. Their views and mine are that things have not been going well and I am mindful of a comment at a business owners’ meeting: One member wanted to keep his cell phone on in case there was an emergency. In response to a question as to what sort of emergency was possible he said someone could ring through an order and his staff would panic as they had forgotten what to do.
Look at all the consumer product advertisements. No deposit, no payments for a year and no interest charges for two years. You don’t set those terms if business is brisk. It would be interesting to bargain to see what the cash price is when such deals are advertised.
In the October National Bank survey only one sector did not think that business would deteriorate. That exception was for electricity, gas and water and with near monopoly positions it was not surprising they were 50/50 for the future. The financiers were quite clear the economy was heading down. The survey was completed before the formation of the new Government. The policies adopted will ensure that their expenditure will increase and short term that has to be good for business. Winning the World Cup for rugby will also help to keep the economy on a roll.
The exchange rate. Over the last couple of months I have read well reasoned articles proving that the exchange rate was going up and different articles advising that it was going down. No doubt the views expressed were genuine but they were in direct conflict with each other.
I am often asked by clients whether the exchange rate will rise or sink. I always advise that if it does not go up it will decline unless of course it remains where it is .The truth is that no one knows and if they did they would not be working for a living. The exchange rates depend more on what happens overseas than on what happens here and even the Reserve Bank now has doubts about the effectiveness of its policy of increasing interest rates. All it does is punish productive firms and make it harder to export at a profit.
Changes in technology. No doubt about this one as the technology changes will continue at a great pace. Technology does not stand still. Watch out for the advance information about Printech 2006 and make it your business to be there so you know what is happening in the wider industry. It is also essential to read New Zealand Printer and not put it in the pile for later.
An excellent business policy is “no secrets and no surprises”. Keeping up to date with the industry should help eliminate the surprises.
Immigration. This is likely to continue at a low level as current Government policies do not appear to be generating any applications from potential immigrants. That could change if there is a dramatic increase in terrorism overseas as such events are often the last straw which make people leave their homes and friends and move to somewhere thought to be much safer.
If the economy really takes off then it could influence New Zealanders on extended overseas experience to come home. That would in turn provide some skilled labour for the industry.
Growth industries. My pick would have to be tourism and travel plus our basic farming and horticultural industries. If the dollar drops there will be an increase in their activities and they will be able to pay a good price for their supplies. I have mentioned tourism before and recommend some overseas market research to see the extent of what is possible. The printing industry is the main beneficiary.
Those then are my best picks for 2006.You do not have to agree, but think about them as well as any others and how changes will affect your business.