GroupM boss: if Europe goes into recession next year, Australia will follow
The boss of Australia’s biggest media buying group has warned of a difficult year ahead for the media industry if European economies hit troubled waters in 2012.
Unlike in 2008, when the country weathered the global economic crisis largely thanks to the mining industry, in 2012 Australia will follow Europe into recession, reckons John Steedman, chairman and CEO of GroupM.
“I don’t believe the natural resources sector will be sufficient this time round to buffer Australia,” said Steedman.
“Further, the Australian consumer is tending to save as opposed to spend, and there are no indications that will change as we go into 2012 – as witnessed by the retail industry, which is experiencing one of its worst trading years in some time.”
… then why is he smiling?
@Logic must be the moustache… or he has a poncho under his shirt. It’s impossible to be unhappy in a poncho
What’s worst? Taxi drivers spruiking the next big thing in listed stock or advertising executives talking macroeconomics? What a funny world we live in, or to paraphrase Linda Blair, “what a lovely day for an exorcism.”
(Edited under Mumrella’s comment moderation policy)
…because he’s loaded, so a recession won’t affect him…..
@ Logic…. lol
John is right about the knock on effect, but I am not sure what he means by “if” Europe goes into recession as most countries in the EU are already in recession and some are tinkering on the edge of “depression”
All signs are pointing to Australia’s economy shrinking further in 2012 as unemployment goes up and consumer confidence goes down 🙁
Maybe his moustache studied economics.
Gee Stevo, no s…..t!!!!
According to Charlie Nelson – whose foreseechange survey has proven to be a very accurate predictor – Willingness to spend has started to increases – albeit slowly. Yes saving intention is also up while the third option debt repayment is sharply down allowing some increase in spending. So the outlook is not all bad. To say we survived the GFC due to the resources sector is also a little misleading. The government stimulus package was the main driver in maintaining consumer spending . The stimulus was underwritten by resources earning to some degree but mainly by the surplus built up over the previous 5 years. Given the revenue expectation from resources is now bigger than 4 years ago and the huge investment in resource infrastructure is happening now and is way bigger than 4 years ago I dont think his argument stacks up.
Hardly enlightening stuff, and best left to the experts on this subject.
Most folk are aware that China is slowing down.
Nice hairdo and he looks smart, like the fresh shirt……..
Yes we have been warned, but retail has had it coming for a long time now with their inflated prices and 300-400% mark ups on cost.
Aussie consumers are savvy thus the tightening of the purse strings and buying online.
Europe is in a recession and this is old news and we all probably feel it’s a bit of an insult being told by mr smiley up there. We all know some uncomfortable times are comin’, so hold onto your hat Dorothy.
The man in the Youth off the streets campaign is wearing a poncho. I bet he’s European.
The economy is going to tank. Local retail is going to get smashed out of the park. Distribution monopolies into Australia will tumble. Old media models will die.
And the advertising budget of Australian business will (continue to) shrink dramatically. For those who are left in business anyway …. There’s a fundamental reason for all of this that often gets skirted over. For decades, many Western nations have been spending more than they produce. Just like households, this eventually reaches a critical phase that leads to a sudden collapse. We have reached that point.
Buckle-up buttercups, because this ride is about to shift from roller-coaster to horror.
Cheer up gig. Methinks you’ve been listening to Tony Abbott and bit too much.
The sun will rise tomorrow and the sky is not falling.
Europe is in recession. Perhaps throwing Greece to the hounds and saving Italy will be the answer? However sometime you just have to go down before you can get up again…
Either way China is slowing down and if they slow as sharp as many credible pundits predict the demand for our iron ore will reduce from the Chinese.
India is moving and shaking and there are many businesses and needs supplying and demanding, internally in India… Nuclear energy is a palm being greased ahead of further trade deals with the Indians.
Could it get worse in Europe? Many say it is inevitable. If it doesn’t; nobody can see us tanking upwards, anytime soon.
Australia is still a safe place to be compared with anywhere in Europe. I know where I want to be right now.
Will we crash? Perhaps. The probable answer is that we will stay very flat with perhaps a drop next year and a slight rise for the next 3…
Things aint what they used to be…
What a load of nonsensical mumbo jumbo from those who actually attempted to take the article seriously. Reading between the lines, if you work for GroupM, no matter how well your company performs in Australia, don’t expect a pay rise or the ability to replace staff in 2012.