Just like in the natural world, where there are animals that are uniquely sensitive to changes in the environment, in the business world there are business that reflect changing times.

This thread is meant as an impartial reflection of the economic environment although my first post is far from rosey.

One indicator species are transportation companies, shipping forwarders give us a unique insight to how the retail sector will be doing several months BEFORE the offical figures are released.

My family is in shipping and I get daily reports of what is happening in the world of transportation.

Retail demand is massively down - although not overly visible in official figures yet, - it will be soon - to be reflected in retail sales figures in the months to come.

Shipping costs have dropped as large shipping fleets cut their prices to fight for the reduced demand - currently highly competitive and thus becoming far less profitable.

It would be a change if you did post a rosey (sorry Rosy) picture - apart from the situation in Hungary of course. If you speak to most business people at the moment you will find that there is concern about the economy but on the ground the situation is still positive.

The "crisis" is limited to the availability of funds for mortgagees (temporary) and businesses extending themselves just too far for the current circumstances. Businesses (plural of business) and individuals who don't have an immediate need for credit are doing OK thanks.

Incidentally, how big is your family's shipping business?
Huw

Forwarding company that moves about 1000 containers a year, not a huge company - but very profitable :)

We target specific companies to work with - we do in depth credit checks with every company we do business with. We work with small to medium size companies with positive balance sheets, -we provide the full service that these inexperienced companies require when expanding into international markets.

We avoid the big international conglomerates since they can easily get better rates than we can provide - economies of scale etc.

We arrange shipping for several large wholesalers that supply stores like Argos, John Lewis, Morrisons and I can tell you now that these wholesalers are reporting a 50% fall in demand = reduced demand for our our services as a result.

Where many forwarders are suffering, whilst we are having the most profitable period in the company's history due to our shift away from servicing companies that are reliant on the retail sector (as I said before, we saw this credit crunch coming).

In the past we have moved vast quantities of furniture ........ and unfortunately I can report that furniture manufacturers & suppliers are hitting the wall at an alarming rate, - news that is currently not reported anywhere yet.

Stores such as B&Q, Homebase etc are going have dismal results.

Most people just dont seem to get how this drop in international trade is going to impact the UK economy ........ fail to see what is so obvious to some.

Most people here on this forum seem to make their money primarily from property - thus have a different perspective to myself.

Knowledge is power and we get the trade news from a wide spectrum of industries this allows us to effectively see things ahead way before they are common knowledge thus allowing us to act accordingly.

I work personally work in finance - thus see things sooner than most regarding availability of credit. I can report that personal loans are getting harder to get on a daily basis, we have cut who we will lend to (riskier categories of people) by about 25% in the last 2 weeks. If you have missed more than one or two payments on any of your credit cards or loans in the last 3 months and you will be declined - even by subprime lenders.

So yes, things are going to get worse. Im sorry you don't like what I have to say, indeed I would love to report good news ..... if there was any.

Huw,

You said ...... "If you speak to most business people at the moment you will find that there is concern about the economy but on the ground the situation is still positive".

We speak with a large range companies comprising of many industries.

Please inform us of who you speak with Huw, which industries.

We are here to share our knowledge and learn after all.

http: / /www .bloomberg .com /apps /news?pid=20601102 &sid=apsig3oIQ8aI &refer=uk

Persimmon Home Sales Drop 24%, Defers Site Openings (Update1)

By Scott Hamilton

April 24 (Bloomberg) -- Persimmon Plc, the U.K.'s largest homebuilder by market value, said sales have dropped 24 percent so far this year and new development has been halted because of sliding demand.

Revenue dropped to 1.37 billion pounds ($2.71 billion) from 1.8 billion pounds and volumes have declined 18 percent, the York, England-based company said today in a statement. Persimmon dropped the most in five years in London trading.

Decreasing availability of mortgages in the last three weeks has led to lower sales volumes and increased cancellations, Persimmon said. A surge in borrowing costs has prompted banks to withdraw their best mortgage offers, leading banks to approve the fewest home loans since at least September 1997, the British Bankers' Association said yesterday. A slide in property values has also knocked the confidence of potential buyers.

``It is difficult to predict when the market will improve,'' the builder said in today's statement. ``Against the current backdrop, we have postponed the commencement of scheduled new sites until the mortgage market improves.''

Persimmon fell as much as 7.4 percent to 602 pence in London trading, the sharpest decline since December 2002. The stock was trading at 615 pence as of 8:21 a.m. local time. U.K. homebuilding stocks dropped for the third day.

Analysts at six banks have either cut their ratings, reduced their share price targets or lowered their estimates for U.K. house builders since the country's largest, Taylor Wimpey Plc, said on April 17 that sales dropped ``significantly'' this year.

Stocks Fall

Homebuilding stocks fell April 22-24 after Merrill Lynch & Co. cut its recommendations on five companies and the London- based Bankers' Association, which represents the biggest U.K. banks, said lenders granted 46 percent fewer mortgages last month from a year earlier.

``Whilst we continue to focus on achieving the best possible selling price in every location it is likely that, with the continuation of current conditions, the market will become more challenging,'' Persimmon said today. ``As a result an increase in discounting, marketing costs and incentives are being utilized in the market to compete for the reduced level of demand and this is having a negative impact on margins.''

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net.

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Since developers are the KEY indicator of when house prices will recover (usually the first to recover - several months before it is reflected in house prices) - I take this as dire news indeed.


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I'm not sure anyone here will be surprised by this report. People are finding it difficult to get mortgages and that's likely to continue for a few months to come. But then things will settle down - it's actually surprising that the current "crisis" isn't having a bigger impact. The reality is that as I said before, it's a relatively localised issue affecting the property and banking sectors in particular, with the "real" economy relatively unscathed. It's being pushed as a crisis by the media because it's a good story.

I've got a development site in Wiltshire which has planning permission for 5 detached houses. Without any indication that I am looking to sell I've received offers for the land from 3 local developers. They are not far away from a value at which I would sell and it's interesting that there are in fact developers out there who are cash rich and are looking to take advantage of the current weakness in values. That's the other side of the coin Richard in the "real" world outside high street banks and media reports which when they oppose your view are hysterical and when they agree are fonts of wisdom.

As for who I speak to, I'm in an industry where I come across a lot of senior people in different businesses and their views echo that of the CBI and others, which is, as I said above, that businesses are still performing well, making good profits and there is absolutely no sense of the major depression you keep forecasting.
Huw

Forgive me but don't you get around 5000 containers on one ship? 1000 containers a year is hardly a bellweather of the UK economy.

Its not the number of containers a year that matters for our purposes, but rather the interaction with 1000's companies that we speak to trying to get the business. We have to understand our customers needs in great detail, and part of that is understanding their future requirement and much of it does depend on the economic outlook.