2013 – Recovery, Crisis or Damp Squib?
Our World | On 19, Dec 2013
Damp Squib? Now there is a phrase usually reserved for a non firing firework. Is that a fair reflection of 2013 or are the indications of economic recovery somewhat more robust? A great many economists will have a great many views on what has happened and what will come and ultimately history will tell us what actually happened this year.
There certainly feels like there have been fewer crisis in 2013, but is that really only because we are becoming more accustomed and somewhat immune to them? They do say familiarity breeds contempt and we have certainly had enough economic issues to breed a life time of contempt! But, would the LIBOR, PPI, Co-op, Vatican and spying scandals of 2013 have seemed a little more troubling in 2008? Certainly we have seen some monumental fines for banks which have largely been ignored by stock markets and public perception. Greece and Spain have increased their debt burden but talk of a euro exit seems a distant memory – perhaps too many hysterical press headlines and Peston blogs of impending global meltdown has left us disbelieving and possibly complacent – the boy who cried wolf springs to mind.
So what of 2013?
The economy has grown, we are employing a few more people, inflation is almost within tolerance, bankers are getting bonuses again, 5 star hotels and BA Club World are full, house prices are rising, England lost to Germany and MP’s are fiddling expenses – surely everything is on its way back to normal?
I would be inclined to agree were interest rates and liquidity levels increasing and mortgage subsidies and quantative easing cancelled. Major corporations certainly seem more intent on lengthening payment terms to boost their cash positions than investing for future long term growth. This suggests that the focus is still on short term results and that means we are still sadly in a very fragile position. There are not many clients in the event industry talking about spending more money on bigger and more lavish events, indeed many are still planning cost reductions and the majority of those with increased budgets are primarily looking to reduce the cost per head and get more for less.
I don’t believe the economic historians of 2063 will look back and label 2013 a crisis, but I also get the feeling that the same said historians won’t be looking at 2013 at all. Hmmm…Damp Squib?