Economy

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Economy

Freight charges where are they going with this?

POS SOFTWARE

Freight makes up about 9% of the Australian economy. That does not include much of the last mile delivery costs.

The problem of deliveries delays is something we all have experienced and talked about here. 

What is also shocking is the increase in the cost of freight. If you are in a low margin industry like ours and many of you are, it does not take much of an increase to destroy your margin. 

Here is a chart of costs what we are looking at now for freight. 

 

I circled in red, what happened since the pandemic hit. We are looking at a now a 30% increase. Is it stabilised or going up, who knows, but it is no wonder that all these experts are concerned. 

The big issue with most of my clients is not whether it goes up but whether it goes evenly up. The fact is that in crisis, it never does. As such, the guy up the road might have the same item much cheaper. Some suppliers are idiots, one thing I have learnt over the years, is never overestimate the intelligence of a person with a billion dollars. Some suppliers have long term contracts in place. Many do not. Some have large stock they need to get rid of sitting here while again many do not, etc., etc. 

What I do know is when a crisis happens, it pays to shop around. For example, I have grabbed some scanners at an excellent price if you are interested, click here,

 

 

 

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Sometime for you to think about?

POS SOFTWARE

I'm afraid I have to disagree with this video.

This shock of COVID-19 is leading to structural changes in the economy, but his arguments are well expressed. So although it is off-topic, this is something for you to think.

We all know people that are doing it tough. Government handouts are no substitute for a job. In Australia, 37,000 deaths in the US would be about 2,800 people.

Anyway look at the video and make your mind up and please let me know what you think.

Why 40,000 People Die for Every 1% Increase in Unemployment - The Big Short

 

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See our country's latest economic snapshot, it is not bad

POS SOFTWARE

These figures are up to 10 June 2020

Before I looked at this, I would say we were worse than we are now. Going by these figures Australia’s economy and labour market are not bad. We have economic growth and our unemployment is better than compatible countries overseas.

If you want you can get more figures and do comparisons click here.

Unfortunately, it does not go by state but if it did I am sure you will see NSW and WA doing a lot better then Victoria.

 

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Upcoming Price Increase

POS SOFTWARE

Computer suppliers have been calling us over the past few days. They are telling us that barring a miracle, as the Australian dollar is currently sitting at its lowest levels in almost 20 years and still going south, that they cannot honour their current pricelists and new ones will soon be issued. I expect that the new computer hardware price will probably be at a 3-5% increase. We have stock in hand enough to last us till late March but after that our prices and everyone else prices will be going up.

The only good news now is that the Australian government stimulus package could help support the economy and the dollar. 

Anyway if you have now any plans to upgrade your computer system soon, now is the time to do it.

 

 

 

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Christmas trade outlook this year

POS SOFTWARE

It is getting to the time of year when many of my clients will do a major part of their trade this year. I hope you have prepared. Among your other tasks, you will need now to make sure your stock ordering is right. This is something our point of sale can help you. You will also need to look into your staff levels again something our point of sale can help you with this too.


Overall, the Australian economy now is moving forward but only marginally.

 

 

In comparison, this is what it looks like on 4 Oct 2017.

 

The figures are roughly the same as the pluses and minus cancelling each other out. For example, the interest rates now are a bit lower but people have fewer savings because Australians are paying off debt rather than spending.

We are in the black (which is better than many countries), our major trading partners are growing, but their growth rates are down, so that does not look good for the future. It would be nice if we got some good exports going, we could use the money. 

There are signs that do appear to show that the yearly growing interest in Christmas trend is static.


Measured interest using Data Source: Google Trends (www.google.com/trends)."

What is still apparent is that the trend of a long Christmas season is continuing, two years ago when I measured it, it was about 6-7 weeks starting in mid-December, now it started in late November and you can expect it to continue to late January about 8-9 weeks period.
 

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Retail sale Australia

POS SOFTWARE

I was quite stunned after listening to all this bad economic news in Australia, saying that retail sales are down. Well here are the latest figures and retail figures are up 0.4 percent month-over-month in August 2019.

 

 

This was the fastest monthly rise in retail trade since February. Admittedly it was .1 percent below budget but that is hardly much of a difference. When does anyone get that close to budget?

As far as retail is concerned, I would say that the interest rate cuts and government tax rebates have worked. 

source: tradingeconomics.com

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Finally the elections coming

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2019 Federal Elections

Unless the press is wrong again on May 18, it looks like we are going to an election. It could not happen quick enough in my view, I have never seen the economy brought to such a halt over an election. Clearly to business the issues are not minor here.

 

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