MaximusMarch 7, 2009
Recession – pah! Ride a bike instead!
Aren’t you bored with all the talk of the recession / depression already? No one knows what’s going on, no one knows whether we are coming or going, down or up, or just remaining to go sideways. Our NZ press is woefully ignorant, having sacked anyone capable of independent thought, and just fill their pages with articles taken straight from overseas journalists. One minute we see a headline saying “Is the Recession over yet?” and “Housing Recovery Seen” and the next minute headlines claim that we are next in line to Iceland for total bankruptcy, and hence just about the worst place to be in the world.
Its all poppycock. New Zealand doesn’t need to have a recession, but I’m sure we can talk ourselves into it if we really feel like it. We have had a marvelous few years of boom, as have most countries in the western world, but our boom was less, and so in theory our fall should be less severe as well. Although America is the cause of this massive global melt-down, and all blame can be laid squarely at their door, if the crash really affects China as well then expect an even more massive global crash to affect the whole world. If that happens – good grief – we may even have to start making things ourselves again.
We all know that in the construction world, it’s the design end that comes to a sticky end first, and so architects laying off staff is the first sign of a bleak future for the rest of the country. There are murmurings in the industry of some NZ practices having a bit of a work squeeze, but I haven’t heard anything about full-on lay-offs in NZ just yet. Not so overseas: in the UK, Rogers just laid off 35 staff, with a beautifully worded letter to its employees (makes you want to work for such a nice friendly employer, just so you can get laid off with such grace), Zaha is letting staff go (bound not to be so friendly a farewell, methinks), and Fosters have just laid off 300 or 400 staff in the most callous and ghastly manner (as befitting all the nasty rumours I’ve heard about that practice), sparking the BD magazine to note: “After Foster’s, no one is safe“. It’s certainly a big change from late last year, when Foster claimed that the recession would have no effect on the practice (note: no longer his – he sold it for hundreds of millions last year). Even Foster off-shoot Make has had a haemorage of staff, closing their Edinburgh office and making 40 staff redundant, but then supporting 7 of them to pop back up in a new practice called 7n.
In the US, there are also massive redundancies in the architectural world over the last few months (with 650,000 new unemployed in the last month in the US, I’d suspect that not all of those are architects!). Gehry has cut his office staff by 50% (but I’d argue that’s because he is a crap one-line joke, and his supporters have tired of hearing the same line again and again). But in true American style, people are rising to the situation, and have produced a helpful action site on Recession and Recovery for those recently laid off. SCB, like others, is looking to the East (near, middle, or Far – i suspect they’ll all be the same) for more work, although stories of expats cars being dumped at the airport in Dubai (mostly it seems by broke Indians going home), seems to indicate that the boom in ghastly architectural porno-smut in Arabia may be over.
To get back to NZ, what are we doing about the coming wall of doom? Fresh from the much-lauded Jobs Summit, where the idea was meant to be that people would all get together to find ways of stopping people losing jobs (but the opposite seems to have happened – in the week following the jobs summit, it seems most NZ manufacturing has shuddered to a halt). There were 2 ideas that got a lot of press – a possible 9 day fortnight, and a cycle path throughout the length of New Zealand. Seeing as that’s going to involve a lot of trucks full of concrete, then perhaps buying shares in Readymix would be the best response to that: while I thoroughly support such an idea, unless it is going to be dug by hand by unemployed architects, I can’t realistically see it making much of a difference to the unemployment rate. We have the problem that our manufacturing base is so small in NZ, putting people to work digging roads won’t really make much of an improvement to the overall productivity rate, although it may move them from the official government unemployment list, onto a government sponsored employed list – either way, we’ll still be paying for that out of our taxes. And speaking of which, while I’m on a roll (or a rant), if the government takes this moment to stop paying in to the Cullen fund then it shows they are even more of a pack of idiots than could have been thought possible. Seeing as our sharemarket has fallen by half, and the value of the fund is down 20 or 30 % at least, then now is the absolutely perfect time to be buying into the market to even out the losses. If they took this time to sell out of the Cullen fund – well – worst thing to do. Ever. That’s the best way to go and cement those losses for all time.