A key issue I am looking at are changes in the credit landscape over time. We need financiers to price, take, and manage risk. Credit intermediation is a critical component of economic development.
Eyes on the NZ construction sector – how a necessary slowdown proliferates across the broader economy.
Construction, and housing more broadly is at the epicentre of the economy. A report commissioned by the Property Council has estimated property is the country’s largest industry, worth more than $41 billion directly to the economy, equating to 15 percent of gross domestic product.
Sometimes you need to step back, take a deep breath to separate the wood from the trees.The economic environment has changed massively. The changes are not just cyclical or temporary as the economy moves up and down. And changes cover both economic and social aspects. Businesses need to adapt to both near-term shifts, but deeper […]
Warren Buffet once commented that when the tide goes out, you find out who has been swimming naked. Skinny-dipping has been rampant. The economic cycle has turned and the piper needs to be paid. Inflation is rampant. Taming inflation is not growth (think business revenue), margin, or asset price friendly. Night follows day just as […]
Businesses should be mindful that central banks are now on the warpath against inflation with the rhetoric and expectations towards higher interest rates ramping up. Businesses need to be thinking about what it means for them as the economy moves from the boom into reset mode. Many business people have not seen the destructive impact […]
The housing market has traditionally been a key funding source for businesses and also entrepreneurs looking to have a crack at an investment. The balance sheet was leaned on. Clever business bankers dressed up business loans in housing attire. Those days look to be ending, one reason being the Credit Contracts and Consumer Finance Act […]
The credit environment has significantly tightened, especially in the housing arena, and of course this has flow-on implications for businesses reliant on lending secured by residential property. The house has been the implicit financing vehicle for many businesses. Tighter access to credit could make 2022 a crunch year for undercapitalised small-medium sized businesses that have […]
Debt levels are the normal focal point when talking about financial vulnerabilities. An under-appreciated reason for business failure is a lack of working capital, i.e., the cash to manage short-term commitments and operations. Having sufficient working capital and cash flow are business basics. They will be key areas to watch over the coming months as […]