Victorian Economy To 'go Into A Recession'

[Dagabond]

  Quote

Victorian economy to 'go into a recession'

Thousands of recent Victorian job cuts are just the beginning with the state's economy headed for recession, according to an economist.

- Recession on way

- More dismissals

- Confidence 'evaporating'

Monash University Economics Professor Jakob Madsen said Victorians should brace themselves for more job losses and economic pain as the economy continues to slide.

"We will see a much higher increase in dismissals as we are going to go into a recession," he said.

"I think it's going to easily last a couple of years or longer. A recession historically lasts for a couple of years and I can see no reason why it would be shorter than that."

Professor Madsen said Victoria's manufacturing industry had lost its competitive edge due to the strength of the Australian dollar.

He said as the European and United States' credit crisis hit home the economy would begin to crumble.

The jobs news was mixed in Victoria today with IBM announcing 300 new jobs in Ballarat and car component supplier Unidrive saying 40 jobs would be slashed after Ford announced 350 redundancies earlier this month.

Australian Manufacturing Workers Union state secretary Steve Dargavel said he expected thousands of more jobs to be lost in Victoria.

"When you have a major car manufacturer like Mitsubishi close and another manufacturer like Ford reduce its volume substantially, and GM Holden in a lacklustre position, the components companies have reduced orders and ... (there have been) redundancies at component manufacturers as a consequence," he said.

Mr Dargavel said Victoria's role as the nation's manufacturing engine room had seen it bear the brunt of recent job cuts with mass sackings at Ford, GM Holden, South Pacific Tyres, Kenworth and Don Small Goods wiping out nearly 2,200 Victorian manufacturing jobs since June.

He said the union was seeking a round-table meeting with the State and Federal governments to mastermind how the local automotive industry could cash-in on the growing demand for smaller, greener cars.

The manufacturing sector has not been the only industry to feel the pinch with Fairfax, publisher of The Age, yesterday announcing 550 job losses in Australia and New Zealand and finance company Suncorp Metway today refusing to rule out redundancies after posting a 47.7 per cent decline in annual profit.

A Suncorp Metway spokesman denied there was a "program of job losses" but said chief executive John Mulcahy could not guarantee jobs given the current "challenging" economic environment.

Suncorp's announcement follows about 600 job cuts by its competitor Insurance Australia Group last month.

Premier John Brumby said the extra Ballarat jobs announced by IBM today were on top of 446,6000 jobs created by the State Government since 1999.

But recent figures were not so rosy with the total number of full-time employed Victorians dropped by more than 16,000 from the start of the year to the end of July and the state's 4.6% unemployment rate above the national average of 4.3%, according to Australian Bureau of Statistics labour force figures.

Opposition Leader Ted Baillieu said business confidence in Victoria was evaporating.

"Labor has been promising a manufacturing strategy for 600 days and has done nothing in the meantime to help manufacturers endure some of the most difficult economic pressure in 20 years," he said.

Melbourne Institute economist Michael Chua predicted job cuts would continue for the next two months but rejected suggestions of a prolonged economic downturn.

Dr Chua said he believed if the price of oil continued on a downward trend, the economy would improve as consumer confidence grew.

"We are hitting the bottom before picking up again," he said.

Professor Madsen said he defined a recession as two quarters of negative GDP growth per capita rather than the traditional definition of overall GDP growth.

He said he believed the upcoming recession would impact the whole of Australia, except Western Australia where the mining industry would shield the state from the economic slowdown.

JOB CUTS

August:

Car components company Unidrive sacks 40 workers.

Suncorp Metway can't rule out job losses.

Fairfax slashes 550 jobs across Australia and New Zealand.

Kenworth cuts 80 Melbourne manufacturing jobs.

Ford announces 350 redundancies at Broadmeadows and Geelong. The announcement follows 600 job losses at Geelong when the engine plant closes in 2010.

Roy Morgan Research sacks 56 Melbourne-based call centre workers.

Cadbury Schweppes announces 330 jobs to go in Victoria, New Zealand and Tasmania.

Boeing to cut more than 500 Melbourne jobs within 18 months.

683 Starbucks workers axed after the closure of 61 stores.

60 workers sacked at Ardmona's Shepparton and Mooroopna canneries.

Up to 70 workers at the Victorian Department of Primary Industries axed.

Diners Club sacks 130 Melbourne workers.

24 jobs at Wangaratta textile firm Australian Country Spinners cut.

July:

Dons Smallgoods sacks 620 workers, 400 in Victoria.

Qantas to axe up to 1500 jobs, all but 100 expected to be in Australia.

Insurance Australia Group (IAG) announces 600 job cuts.

The closure of Dartmoor sawmill costs 130 jobs.

June:

South Pacific Tyres announces 587 job cuts at Somerton tyre plant.

GM Holden axes 531 job at its Fisherman's Bend plant.

About 100 Kleins Jewellery employees to be made redundant after collapse of the Dandenong South based business.

http://www.theage.com.au/national/victoria...na.html?page=-1

Bit of worry when you see it all in one spot like that....

[Grudgee]

Madsen is a fool. Quoted for truth.

Edited 09/09/08 02:04 AM by Grudgee

[xr6 typhoon]

You guys got nothing on NSW. And now we have people running the state that no-one really voted for!

[TUFXRT6]

Hi All,

Dags Im not pointing my finger at you but this whole "Recession" talk only leads to recessions.

We can not certainly think that if Australia was to go into a "Recession" that it would be just Victorian focused, infact if you have a look at the numbers based on your list it probably involves more international / Australian wide reductions rather than local.

I will give a quick example:

-Suncorp: stated that they "may" cut jobs. Considering this is a QLD based company I think the first place jobs will be going is there.

-Kenworth: they export parts as this is their manufacturing business (not only directed at Victoria but a global slow down).

-Ford: Exports from the Broadie plant (Again part of a global slow down)

-Boeing: These parts are produced locally & sent overseas, (this was part of Boeing's global slowdown)

-Starbucks: Have cut thousands of jobs internationally as part of the "restructure" to become more profitable globally.

-South Pacific Tyres: Tyres are produced overseas at cheaper margins (we can thank the AUD for helping there demise)

-GM: Again part of the GM global slow down

As a Victorian I believe we are going to feel some pain but compared to other parts of the world we are doing really well so we need to stay positive.

P.S. Waits for examples to be torn to shreds

Regards

TUFXRT6

Edited 09/09/08 07:28 AM by TUFXRT6

[YPURV4]

PPHHFFT more media bull sht, it dosnt bother we either way.

But I doubt it will happen.

[hypnodoc]

Good on ya Dags, my favourite topic. We ain't seen nothing yet. Watch the hyper inflation come quickly following now that Henry Paulson has got approval to bail out Freddy Mac and *beep* Mae so all the punters go and prop up the banking stocks and the market lifts again, its all emotive nonsense and with 2 weeks some more truth will leak out and it will fall to a lower position than it was yesterday. Krudds govt hasn't said anything publicly but they have just bought 6 billion worth of dud mortgages from the big 4. Our awesome global economy is in deep deep do do. see below.

Rudd turns to fascism as economy collapses

Australia’s economy is collapsing at an accelerating rate, and desperately needs strong government intervention to save it, but instead of promoting the common good of the people, the Rudd Government’s actions increasingly reveal a proto-fascist, Thatcherite agenda.

The economic crisis in Australia is part of the U.S.-centred global economic meltdown, with the shockwaves hitting average Australians:

A wave of job losses across Australia is throwing thousands of families into crisis, and the lost jobs are in productive, industrial areas of the economy. For example, in Victoria alone, since June, 600 jobs have been lost at Goodyear’s South Pacific Tyres, 531 at Holden, 400 at Don Smallgoods (250 at Don’s Perth operation), 350 at Ford (with another 1000 slated to go), 350 at Boeing (over 500 to be lost in the next 18 months), 130 at Carter Holt Harvey’s sawmill, 80 at Kenworth Trucks, 80 at PBR brake manufacturers, 60 at SPC, and 40 at Unidrive. The automotive industry job losses will have a devastating flow-on effect—for every auto worker, there are at least six workers in the supply chain.

The combination of job cuts, high interest rates and hyperinflation in the cost of every day necessities has pushed almost a million families into mortgage stress, and hundreds of thousands are losing, or are set to lose, their homes.

The average superannuation fund went backwards by six percent last year, and many went down 12 percent or even higher; the government has conditioned people to look at superannuation as their main retirement security, which has exposed them to the global financial meltdown. Not only are pending retirees starting to panic, but the skyrocketing cost of living has pushed existing retirees and pensioners to the edge of survival.

What is Kevin Rudd doing? He is:

Unleashing an education “revolution” under the smokescreens of “transparency”, “competition”, and “standards”, to make it easy to sack teachers and principals, and close down or merge schools, modelled on the school administration policies of New York Mayor Michael Bloomberg, a leading advocate and example of the private business takeover of government;

threatening to cut off welfare to the poorest and most disadvantaged families in the community, as a punishment for school truancy;

targeting old-age pensioners as an “unsustainable” burden on the budget, and pushing to raise the minimum age, which disturbingly recalls Hitler’s “useless eaters” argument; all the while it is sitting on a record $21 billion budget surplus;

insisting on more free trade, including more tariff cuts for the automotive industry, which will destroy most of what’s left of our manufacturing and high-technology machining capacity, and obliterate our most high-skilled jobs; and

shutting down whole swathes of our agricultural production, with climate change policies relating to water use, land clearing etc., and putting what’s left of our industrial economy on notice that it will also be shut down by the impending carbon emissions trading scheme.

Rudd is modelling his government on the “New Labour” régime of Britain’s Fabian PM Tony Blair, including appointing imported British Blair apparatchiks to direct his government’s policies through a central policy unit; Blair’s privatising and de-unionising agenda proved so right wing, he was dubbed “Thatcher in drag”.

The Australian people voted against a continuation of Howard’s economic fascism, but under Rudd they are getting an even bigger dose.

Through my work I know some extremely wealthy European industralists and their familys, these people are Billionaires so their wealth is disgusting. One was laughing on the phone last night telling me how the british economy is in free fall, and now accumulating debt at the rate of 2 million pounds a minute 24/7 so try and figure that one out. The yanks are trying to kill the value of their dollar so they don't have to pay the chinese the huge amount of money they owe them. Australia has yearly earnings of only 62 billion a year and no real wealth creators left as they have all been taxed out of existance or taken over by multi nationals, and the TRUE combination of our internal and external deficit now exceeds a TRILLION dollars, and there is no mathematical equation that can demonstrate we could ever pay it back. If we owned our resources we would perhaps be OK but 98% are in foreign hands now so we are knackered and Mr Keatings Banana republic has become a reality. Wake up people it is all slip sliding away. No wonder they voted the treason laws away in the 1970s.

[tab]

So what you're saying is we have nothing to worry about yeah?

[Dagabond]

  TUFXRT6 said:

Dags Im not pointing my finger at you but this whole "Recession" talk only leads to recessions.

I agree wholeheartedly with that line, but when the numbers start stacking up in the coarse of just three months like they have in that list it has to make you think twice about what's coming...

[Dillz]

I can't be bothered reading it, can someone just give me the gist of it.

[Kimberley Scott]

Victoria is heading into a recession.

Hope that sumarises it for you Dilz.

Scotty