I have decided that the problem in
Australia today is coffee... In particular, lattes and flat whites.
Well, to be fair, it's not so much the coffee that is the problem but
the conversation that seems to go with it.
Every day I hear it. The boom is over.
Mining is finished. China is crashing. America is stuffed. The EU
is going to break up. These comments are coming from everywhere and
everyone is an expert! So I ask questions: “What makes you think mining is over?” “Where did you get your information from?”
“Why do you think this is the case?”
Invariably the answer can be neatly
summed up as “Someone told me, that someone told them, the boom was
over.” And that THAT meant all the mines are closing down. Call it
silly but I have this vision of the seven dwarves singing “Hi Ho,
Hi Ho, It's off to work we... oh... um... Where have all the mines
gone?”
But is it really over? Personally and
professionally the answer for me is an emphatic no.
Now before you write me off as a
delusional crank, let me put this out there. There has been a
change, for the worse, in the market over the past 6 months. But my
argument is that it is nowhere near a recession, downturn, collapse,
depression, or any other word for economic woe you can think of and
it certainly doesn't require the sacking of five of the seven
dwarves.
At Skye Recruitment we service the
Mining, Construction, Consulting and Oil & Gas sectors. Our
clients are at the coal face (literally) and stoking the furnace
(figuratively) of the Australian economy. Other than the Oil &
Gas sector though, they are all held up as sectors that are
struggling. There have been redundancies in these sectors (Xstrata,
BMA), there have been major headline projects put on hold (Olympic
Dam) and there have been some major share price movements
(Fortescue). And yet companies continue to ask us to hire people.
And not just one or two people to cover critical people, they are
asking us to find multiple people.
So where is this dichotomy coming from?
I believe that since the GFC, which marked such an emphatic full stop
to what has been termed the “mining boom mk1”, people have been
worried about being caught out by something similar again. In
addition to this I think people have become used to a rate of growth
that, simply put, is not normal - and if growth moves to anything
that could be termed normal people panic. And, like all panics,
logic doesn't play much of a part.
On the 20th of October it was revealed
that Australia has the highest median wealth in the world at nearly
$220,000 per adult and that the wealth of Australians had quadrupled
over the last ten years. We are buying more stuff, drinking more
booze and taking more punts. Yet at the same time we are telling each
other that the sky is falling.
Business is a funny thing - it's all
about confidence. People go out there, put their money on the line
and gamble that they can turn their idea into a successful business.
This happens every day and the small businesses of the world are the
drivers of our economy. To get your business going or growing you
have to back your dream and put lots of things at risk. To do that
you need confidence! Nothing will sap your confidence like people
telling you the economy is going to crash.
If we sap the confidence of people,
they won't start or grow their business. If that happens then
reality will catch up with the talk and we really will be in a
recession as the engine room of our country stalls.
So next time the conversation turns
towards the economy ask yourself if what is being said really does
represent what is happening or if people are talking themselves into
a gloom. If you can change just one persons perception this Café
Recession can be stopped before it becomes a Real Recession.
