Economic Recovery

[Logistics Conduit]

Dear Members,

Some people in the market are saying that the global economy has
already reached rock bottom and is slowly recovering.

What do you think?

I think we are now at a period before we experience another big drop
and things will get worse before they get better.

Please share with us your views.

ED

[William Lee]

Hi ED,

Here is my view.

Though in March, sales in my company do pick up dramatically, from the sudden dive in sales since Nov 08, but in Apr and now in May, sales does not seems to improve,instate, it drop a bit.

No one is able to give a concrete direction as now. Some said the US economy has bottom out and heading for the recovery road. Lots of them, especially Asia countries, are betting on China's strong economy, to save the world. At least, China do show their strong 8% grow. US's companies still giving us bad news...

Oil is still high, that adds burden to company operational costs, which they are trying very hard to lower their products cost, so as to meet sales target. Wages increment are freeze in most company, bonuses are cease. Consumers are tightening their belt, only spending on necessity, this have create a more constrain on money flow in the market. If this persist, world economy definitely will slump again.

 

Thank you.

[Leonard]

Hi,

 

Just a few questions after reading the post:

 

1. How about the other Asian giant - India? How is thier market doing and are they also another "saviour" to the world economy as well?

 

2. How about the Arab nations? Being one of the richest and most diversified regions with the backing of oil, how are they "chipping" in to help the world economy?

Seems like the world economy cannot depend on a few countries alone to patch the holes.

 

Regards,

Leo

---

From: William Lee <ykle...@gmail.com>
To: ls...@googlegroups.com
Sent: Monday, 11 May 2009 10:46:10
Subject: [lscms] Re: Economic Recovery

---

New Email names for you!
Get the Email name you've always wanted on the new @ymail and @rocketmail.
Hurry before someone else does!

[klcreative]

I honestly believe things will remain flat for 12-18 months, with a
weak growth possible at about 2%. My fear is that companies have
established capacity levels that directly relate to the credit market
blunder. As we all know, the availability of credit can strengthen
demand. But the natural level that credit should play in capacity
estimation is in question now. So, it will remain flat until companies
can understand consumer trends, as it relates to this new marketplace.

[Logistics Conduit]

Good points and I tend to agree that markets will remain low or
deflate / regress further before things start to pick up.

What should we do about this?

[klcreative]

This is really the time to realign your strategies, establish new
levels of efficiency, and create new marketing channels through
emerging technologies. It really is a time for opportunity, because
everyone is guessing, but few are calculating. Most businesses are
expecting things to go back to normal, but I think their business
model will fail in the end.

Take this opportunity to figure out how your industry will change, and
look at the risk of you not changing.

[John Maloney]

Hi --

There are a lot of prediction markets for all economic prognosticators. See,
join the networks, events and communities...

http://www.pmcluster.com/

CI/PM making enormous impact to SCM and collaborative forecasting, for
example.

Cheers,

John

-----Original Message-----
From: ls...@googlegroups.com [mailto:ls...@googlegroups.com] On Behalf Of
klcreative
Sent: Thursday, May 21, 2009 11:12 AM
To: Logistics & Supply Chain Discussion
Subject: [lscms] Re: Economic Recovery

[lakshmi kumar]

dear sir can u give us some figures on the same

[Logistics Conduit]

klcreative,

I really like the way you think and what you have said.

Great post!

ED

[William Lee]

Dear klcreative,

I agree with your analysis.

For example, I wanted to buy a photographic equipment costing SGD2,000 in end April 09. I am using the Credit card installment scheme, for a period of over 12 months. Before 1 Apr 09, such scheme interest rate was at 2%, after that was 5% over the dealers selling price. I was shock and argued with the Salesman, because I took up the same scheme at 2% in Nov. 08 for another product. After his explanation of the revision from 2 to 5%, I voided the sale.

 

Consumers confidence have drop in Singapore. Ministry of Labour announced more retrenchment coming in the next few months.

Panic situation is what I would describe it at this moment.

 

Here, Financial firms are taking stringent precaution with borrowers. On the other hand, consumers are tightening their belts. What happen if I am next to be retrench, or getting a huge pay cut; resulted not being able to service the monthly loan.

 

How to get Consumers' confidence back to pre-crisis level?

How much more can a company continue to cut cost (internally and externally), so as to hold the sale level, even not increasing?

Quality high cost products are difficult to sell in this kind of situation. But low cost low quality products may not be able to steal the lime-light though, as consumers may not want to buy non reliable products, as every cents count.

 

Recovery will be slow for this economic downturn, and painful for everyone. It would be good if those who have the power to spent to spent more - wishful thinking.

[klcreative]

William Lee,
The next steps for the credit market are pretty scary in my opinion.
In 2005, I was confident that interest rates would begin rising
sharply, but they didn't for some reason. Instead, they went lower. I
found out Sunday on a CNBC TV show that no one wanted to be the one
who ended the party. So, here we are with a list of issues. From what
you are saying about the Singapore market, what should have happened
in 2005 is now taking place, which adds another factor to estimating
demand and capacity.

It's unfortunate for businesses, because demand and price equilibrium
will be an unpredictable thing for the foreseeable future. Capacity
and supply standards have to be weighed against unemployment, reduced
credit supply, and rising interest rates. This can totally shift the
overall strategy of any organization.

I'm confident that deflation will occur. I'm just not sure when the
economy will admit it.

How bad did the housing market affect the economy in Singapore?

[klcreative]

http://www.msnbc.msn.com/id/3683270/

[William Lee]

Hi klcreative,

Yes, not happen in 2005 happen now in Singapore. Is it a delay telecast?? LOL...

 

At this moment, Singapore's government trying their best to help manufacturing and service firms in Singapore, by subsidising the firms employees with an average of 20% of their wages monthly. This definitely helps companies to tie over higher overheads with lower revenues income. At the same time, lower the retrenchment trend in Singapore by maintaining employment rate here. I can imaging if more retrenchment going to happen in Singapore; whom the best asset is manpower; Singapore will take longer than other countries to get out of this crisis.

 

My company have been aggressively sourcing for forwarder who able to offer us their best price. We have started to engage a few with good offer that cannot be ignore. We have been engaging this forwarder for many years. After comparing the pricing, we were shock to find that our monthly logistics cost, with almost 40% lesser than the existing forwarder. We have no choice but to switch to survive in this competitive business. Especially at this difficult time. I felt sorry for them.

 

You asking about Singapore housing market situation. We have about 70% of citizen live in HDB (Housing Board Development) flats. Some countries call it government flats. In this sector, pricing are quite stable. Most residents uses their Central Provident Fund (CPF, contribute every month from our salary) to purchase their flat. Nowadays, most mainly buy to live, as the government have put in place restriction to prevent speculation in this sector.

It is the private housing market that are the most volatile one. Surprisingly, those high-ends private housing are selling better than those sub-urban private housing. This is because of the attractive pricing where the rich find them cheap. Cheap to invest at this time. They would appreciate when the economy recover, given them some good profits. Average private housing are not appealing as the profit would not be as high as up market housing. As buyer in this sector have a choice of buying HDB flat, so pricing do not fluctuate much.

 

Lastly, I think property in Singapore would not be as bad as in the US, and it would be quite flat until the end of the year. Unless situation gets better. Not many would want to change property due to the needs of forking out cash for renovation, and maybe a higher loan rate.

 

Thank you.