Controlling the Recession's Downward Trend
Stimulus Packages Lifting Economy as Businesses Cut Costs
Feb 12, 2009
Amid the doom and gloom there are some things to smile about. For instance, jcreport.com writes that suffering designers and stores are less keen to lend celebrities clothes, which is going to mean they will have to buy them like everyone else. Then there's the spectacle of the media gloating over discomfited bankers wilting under politicians' sarcasm. Wall Street's one-time movers and shakers are promising never to be naughty again. Citigroup's Vikram Pandit volunteered to cut his annual salary to one dollar and apologized over his misguided attempts to buy a corporate jet. Bankers are ditching glamorous girlfriends or curbing their spending. The poor things are banding together to form an unofficial support group called "Dating a Banker Anonymous", reports huffingtonpost.com,
Paris And Milan Fashion Houses
Quirky fashion designer Vivienne Westwood is not helping her business when she counsels fashionistas to revamp old clothes, make safety pin necklaces and "shawls from blankets, tablecloths, curtains or towels." You can almost hear the cries of horror in Paris and Milan fashion houses. Advice like this is bad for business. However, those that do cater to the wealthy are not showing too many signs of strain although buying habits are changing. People who might have bought a Prada bag, for example, now get one from Coach; those who opted for the latter now go further down market. Apparently, it is not about saving money but about showing restraint and good taste in bad times.
Boutique Owners are Saving Cash
Boutique owners are saving cash by taking their own photographs. The grainy effect is artistic. They are also trimming stock and searching out new designers, haggling over prices and paying vendors in advance of receipt of shipments to get better deals. In this economy everyone is a wheeler dealer.
Signs of Hope In the Overall Economy
On a serious note, despite the massive worldwide layoffs and teetering businesses, there are signs of hope in the overall economy. Recent surveys indicate that the huge economic stimulus packages and efforts to revive the markets may be having an effect. Economic contraction may be slowing as rates at which banks lend to each other ease and credit markets thaw. Goldman Sachs is making money again.
Ken Wattret of PNB Paribas in London cautions the economy is not out of the woods yet. "Some of the numbers we had been seeing were jaw-droppingly awful. What we're getting now is a sense that the pace of contraction won't continue at that rate. But it's really a question of being less bad than of being truly good."
Recently, though, the Baltic Exchange reported that ships carrying steel and other cargo were piling up at Chinese ports indicating that the economy may be moving upwards.
Running Business Health Checks
Businesses are taking steps to control costs by cutting workforces, of course, but they are also trimming overheads. Managers are busily turning off lights and lowering thermostats. In summer they will address the air conditioning. Workers telecommute or share offices and extra boardroom or office space is unceremoniously rented out. Bosses are running business health checks reviewing loyalty programs, their customer base and return on marketing investment. There's also some control of paper clips and stationary too.
Job Networking Gatherings
Restaurants watching their high rolling clientele evaporate, cut wine and food prices and either drop floral displays or make them less dramatic. However some are still benefiting from the newly unemployed segment of their former market who are holding job networking gatherings with potential recruiters. The bar tabs may not be as high as they once were but anything is better than nothing.
Venture Capitalists
With many traditional businesses in their death throes, venture capitalists and investors are finally considering putting money into innovative businesses and new inventions. There's a general feeling that it is time for something new.
Economy is Turning Around
There are subtle signs that the economy is turning around but businesses are continuing to cut costs and analyze where they can better themselves. The luxury market is holding its own amid changes and the new concern that consumer exuberance is a sign of bad taste.
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