Hope all our readers, especially those in the Auckland area are okay and your family, staff, houses and businesses are all safe after the major flooding at Anniversary weekend. I have seen that at least one new car dealer lost up to 10 million of stock. Up until this, the main concern with the weather had been the effect on holidays, but as the saying goes, “That shit got real!”
Some of the issues we see coming up in 2023 other than the weather include:
Staffing issues in many sectors including automotive repair (and other areas such as IT, healthcare, hospitality) won’t get noticeably better despite the potential recession. We are not training enough people and some of those we have trained will be tempted to places like Australia where they can earn more.
The new car supply situation will start to recover, and the chip shortage is rapidly being sorted, helped by lower consumer goods sales. Supply chains are normalising after the Covid disruptions and sales will be a bit more muted as the economy tightens.
There is considerable risk the Reserve Bank will significantly overshoot on interest rates and may have to look at lowering them later in the year or in early 2024, before they totally tank the economy. Overseas reserve banks have already started reducing the rate of interest increases.
EV sales will increase as many new models come on stream but there will start to be significant headwinds with a shortage of public chargers (we now have a good spread but only single chargers in most locations which are constantly in use) and also potentially around the lowering of cost savings as oil prices potentially drop with economic activity and electricity rises. In Europe it is now more expensive to run an EV using public chargers than a petrol car in terms of fuel costs, as they have had significant electricity price rises due to the war in Ukraine. At some point soon the government will also have to bring in RUCs for EVs as the percentage in use starts to affect the roading funds from fuel taxes.
Anyway, best wishes to all our readers for a great 2023.
Live long and prosper,
Cathy.
