OPINION
Business smarts The economic cycle has turned. Night follows day. There will be casualties. There always are. Businesses need to be proactive and not reactive facing the year ahead, says economist Cameron Bagrie. AUTHOR: CAMERON BAGRIE, DIRECTOR, CHAPERON
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he economic environment is changing rapidly. Inflation has risen to 6.9 per cent, construction cost inflation is more than 18 per cent, and cost escalation letters are widespread. Inflation is a thief that steals savings and lowers profitability, if not properly managed. Taming inflation means tempering, and potentially belting, growth. Interest rate sensitive sectors who have done well when interest rates were low are now on notice as interest rates rise, and housing activity slows.
Business basics still apply The economic environment has been stunning for many but is getting more difficult as a brutal combination of slowing housing activity, staffing challenges, cost escalations, and material availability hit existing cashflow. But how do you forecast cashflow too and plan, with continued uncertainty over supply, staff, inflation, and Covid’s twists and turns in the background?
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