What does the “V-Shaped Recovery” mean for you and your business in 2021
The strong last quarter across many industries is underpinning the “V Shaped” Recovery that many commentators predicted. The V Shaped Recovery is supported by nearly all economic charts in Australia at this time. We believe the speed of the recovery is underpinned by two key factors:
- Increased Liquidity – Government stimulus and proceeds of increased lending and reduced interests rates means there is additional funds in the economy for spending and investment.
- Adaptability – COVID-19 has shown that businesses can adapt extremely quickly which has led to an extremely fast recovery. This is consistent with the technology advances of the past decade which have generally demonstrated an increased speed across many business systems and structures.
For the 2021 year we are expecting strong trading conditions across the following sectors:
- On-line products particularly in the home improvement space
- Professional services
- Local tourism
- Residential construction and
- Selected property sectors.
Although we are currently experiencing a minor Covid outbreak in Australia, business confidence remains strong, in our view this is due to three factors:
- The community understands the situation and the majority responds to the Government requests;
- We have experience in containing outbreaks and they are a short-term situation;
- The rollout of vaccinations will help bring the pandemic to an end in the next 12 to 18 months.
So while businesses directly affected by lockdown need to remain prepared and capitalized, it is important to remember this is a short term situation which will be solved. China remains an interesting situation and should be watched with caution.
Businesses and investors that have sufficient capital to expand and take advantage of new opportunities are more likely to emerge stronger for the next economic cycle.
We thank you for your continued support during 2020. Our office will be closing today while our team enjoys a well-deserved break.
But there will be no extended January holiday this year… We will be getting our full team on board ready to start work quickly with clients to best position their businesses and investments to take advantage of the trading conditions from 6 January 2021.
We hope you have a Merry Christmas and a Happy New Year from the Macro Group.
Date Published: 22 December 2020