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Why executives want more rate cuts · The SME Stream

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  Speaker 1: The information provided in this program is of a general
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  Speaker 1: nature and is not intended to be personalized financial advice.
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  Speaker 1: We encourage you to seek appropriate advice from a qualified
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  Speaker 1: professional to suit your individual circumstances. Executives are increasingly optimistic
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  Speaker 1: now the Reserve Bank has cut rates, but for how
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  Speaker 1: long can their companies hold on for our economy to improve?
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  Speaker 2: Yeah, it's sill, pretty tough going. I think we've still
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  Speaker 2: got really another probably six nine months where it's going
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  Speaker 2: to be pretty choppy, although.
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  Speaker 3: In the last three months we've seen some improvement. New
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  Speaker 3: Zealand probably tougher than most of the other markets.
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  Speaker 1: Businesses are struggling in this economy as high interest rates
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  Speaker 1: too cold. Over the last couple of years, industries tied
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  Speaker 1: to a consumer spender have taken the biggest heads retail, hospitality, transport,
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  Speaker 1: construction and even some services. We've got probably our highest
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  Speaker 1: bad debt and seventy to ten years. It's all come
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  Speaker 1: off the back of COVID's historic low interest rate era,
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  Speaker 1: where analysts believe some leaders got too greedy with debt
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  Speaker 1: and were quickly caught out.
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  Speaker 4: But hash to say it was a bit of complacency
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  Speaker 4: and laziness, But clearly. I think what call them out
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  Speaker 4: was that zero interest rate and then the firing to
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  Speaker 4: five and a half percent, and we're held it here.
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  Speaker 1: But now the Reserve Bank has started at dropping rates
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  Speaker 1: with a twenty five basis point cut last month and
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  Speaker 1: signaling there's more to come.
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  Speaker 4: Also, our projections are that the OCA comes down to
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  Speaker 4: somewhere around three percent.
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  Speaker 1: Calls in our growing louder for an even bigger rate
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  Speaker 1: cut this month after the Federal Reserve opted for a
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  Speaker 1: fifty basis point cut in the United States. If our
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  Speaker 1: Reserve Bank follows the Fed with a fifty here, it
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  Speaker 1: would take our official cash rate down to four point
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  Speaker 1: seventy five percent. That would be the lowest it's been
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  Speaker 1: in eighteen months. It's a move many executives at eager
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  Speaker 1: for this year's here all the mod of the borderroom event.
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  Speaker 1: Many executives we're keen to see the pace of rate
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  Speaker 1: cuts quickened given the pain the companies are enduring.
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  Speaker 2: I will definitely see more and it'll be helpful, but
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  Speaker 2: it's going to take time. I think it'll be really
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  Speaker 2: probably midnext calendar year before the reality of the interest
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  Speaker 2: rate cuts really actually flows through.
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  Speaker 1: How would you describe the state of the economy right now.
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  Speaker 1: From the business the.
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  Speaker 3: Europe, it's tough work, doesn't matter which economy you're in.
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  Speaker 3: The freight volumes aren't as strong as what you would expect,
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  Speaker 3: although in the last three months we've seen some improvement.
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  Speaker 3: New Zealand probably tougher than most of the other markets,
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  Speaker 3: but certainly you can feel some optimism from the customer base.
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  Speaker 3: You can feel optimism from our people. So is that
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  Speaker 3: transponding into more freight volume? Will We have to wait
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  Speaker 3: and see.
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  Speaker 1: This time last year you gave me the headline that
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  Speaker 1: we've lost our mojo. Have we got our mojo back?
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  Speaker 3: Make?
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  Speaker 2: I think the mojo still wildly in Nison. There's a
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  Speaker 2: glimmer of light, but I think as a country we
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  Speaker 2: still really need to find that sense of ambition, you know,
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  Speaker 2: both on the global stage, but also I think are
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  Speaker 2: seeds of confidence locally.
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  Speaker 5: You're starting to see what I would call hope or
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  Speaker 5: that glimmer of hope. It's been we've been kind of
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  Speaker 5: in a bit of a funk for lack of another word,
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  Speaker 5: for the last couple of years. So people are starting
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  Speaker 5: to see that and therefore thinking about the longer term
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  Speaker 5: from a business perspective, You've got a lot through the
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  Speaker 5: short term, so thinking about what are we going to
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  Speaker 5: need to invest in for consumers themselves. Again, they are
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  Speaker 5: still traveling. You've got ninety six percent of kiwis actually outbound,
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  Speaker 5: are traveling again compared to twenty nineteen. So yeah, there's
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  Speaker 5: there's optimism there that we haven't seen for a little while.
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  Speaker 6: New Zealen definitely feels more depressed still at the moment.
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  Speaker 6: Hopefully some more light on that rise.
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  Speaker 1: I've heard the word hope a lot already this morning.
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  Speaker 1: What is giving a business leaders that hope? And is
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  Speaker 1: it legit? Scrant Oh?
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  Speaker 6: Is it legit? Your look? I think it is because
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  Speaker 6: we're starting to see a few signs. We had a
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  Speaker 6: vehicle sales show in Hamilton just last weekend. We did
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  Speaker 6: better than last year. First time we've done something better
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  Speaker 6: than last year for a little while. So I think
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  Speaker 6: people are just starting to turn. I think definitely interest
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  Speaker 6: rates are what's changing the attitude of people. We've certainly
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  Speaker 6: seen that with the FED cut in the US in
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  Speaker 6: the last couple of weeks as well.
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  Speaker 1: What are some of the hard decisions that you've had
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  Speaker 1: to make in your business and rest of monks.
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  Speaker 6: Yeah, so all those natural things you expect in terms
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  Speaker 6: of the number of people that you're hiring. The capital
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  Speaker 6: expenditure is reduced, and we're definitely looking at at those
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  Speaker 6: other cost cutting missions across the board and getting just
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  Speaker 6: far more assertive in the market on sales, getting more active.
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  Speaker 6: So yeah, it's those classic tough decisions in a difficult market.
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  Speaker 3: Two crazy years that we've never seen volumes like that
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  Speaker 3: before twenty two and twenty three, and it came away
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  Speaker 3: quite quickly, so we had to adjust and that has
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  Speaker 3: meant overflow warehouses helping our customers adjust. Therefore volume, but
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  Speaker 3: amazing people were held on to everybody and everybody sales focus.
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  Speaker 1: You haven't let anyone go. No, you must be one
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  Speaker 1: in a million.
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  Speaker 3: Yeah, but it's about our people. You have fantastic people.
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  Speaker 3: We got to fantastic business.
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  Speaker 1: What is your main focus at the moment as a
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  Speaker 1: business leader for the next twelve months?
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  Speaker 3: Growth, lots of growth.
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  Speaker 2: Big part of our focus is obviously developing our own
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  Speaker 2: people because they're because developing our capabilities is a big
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  Speaker 2: way about how we can help our clients. But then
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  Speaker 2: also you know, we're still big into into our tech
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  Speaker 2: transformations to the program and how we can really really
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  Speaker 2: use that to drive efficiency through our business and through
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  Speaker 2: our casking as businesses.
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  Speaker 5: Next twelve months reviews were finishing that recovery. We for
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  Speaker 5: Auckland Airport were at ninety one percent of what we
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  Speaker 5: were in twenty nineteen. So continuing to rebuild, albeit there
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  Speaker 5: are some structural changes rebuilding getting that momentum moving again
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  Speaker 5: and how we do that. We've got a massive infrastructure
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  Speaker 5: program underway as well as how do we give confidence
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  Speaker 5: to those people that are traveling through through our But.
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  Speaker 7: I think the big challenge probably is going to be
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  Speaker 7: outside New Zealand. What's happening geopolitically. I mean, what's happening
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  Speaker 7: in the Middle East at the moment is very concerning.
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  Speaker 7: That's going to play into energy prices and commodity markets
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  Speaker 7: around the world, and that of course is a critical
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  Speaker 7: component of any economics prosperity.
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  Speaker 1: Volatility you think is going to be one of the
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  Speaker 1: big things going forward.
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  Speaker 7: Then yeah, absolutely, I mean we are globally we're in
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  Speaker 7: an energy transition anyway. The whollmark of an energy transition
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  Speaker 7: or a transition of any type is volatility. Some of
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  Speaker 7: the old some of the new you don't get it
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  Speaker 7: all exactly transitioning the way that you want it, And
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  Speaker 7: I think the world is in transition at the moment.
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  Speaker 7: It feels to me like the world is in a
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  Speaker 7: leadership transition moment as well, where you've got a number
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  Speaker 7: of older leaders that are in the end of their
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  Speaker 7: tenure and a number of newer leaders that are coming
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  Speaker 7: into the start of their tenure. So you've got this
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  Speaker 7: global leadership sort of tension occurring, geopolitics occurring, that's playing
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  Speaker 7: into many of the inputs in the New Zealand economy.
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  Speaker 1: What's your advice to business leaders and business owners for
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  Speaker 1: the next telve months.
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  Speaker 2: My advice is you got to look through the current clouds.
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  Speaker 2: You've got to have that long term view, and I
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  Speaker 2: do think you need to have the aspect of ambition.
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  Speaker 2: You know that as a country, I think we've become
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  Speaker 2: paralyzed by risk, and I think you know, some of
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  Speaker 2: the boardrooms have been paralyzed by risk a little bit
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  Speaker 2: as well, And I think we need to actually balance
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  Speaker 2: that risk with opportunity because actually good risk management is
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  Speaker 2: mostly about how do you actually manage opportunity?
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  Speaker 7: What a great problem to solve?
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  Speaker 8: Great problem to solve logistics for New Zealand growth to
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  Speaker 8: New Zealand economic growth. We're going to get together and
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  Speaker 8: solve the problem.
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  Speaker 1: He's been too much time with politicians.
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  Speaker 6: He started beside, it's a real problem.
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  Speaker 8: I spend lot of time with customers. It's a real problem.
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  Speaker 8: The numbers keep changing, they keep on talking about the ships.
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  Speaker 6: It's not about the ships.
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  Speaker 8: It's bring everyone together, to bring the ships, supports, the
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  Speaker 8: customers together. This is the customer logistics problem. It's enough
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  Speaker 8: to do with the ships.
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  Speaker 1: Have you got your silk to wind my wedding yet?
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  Speaker 6: Have you?
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  Speaker 7: Well, I've got lots of suits to.
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  Speaker 1: What you're going to get a spicial?
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  Speaker 4: A bowtie?
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  Speaker 8: Oh I'll wear a bow tie.
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  Speaker 4: What do you think