Is the Building Industry Doomed and Taking Us With It?
The most common question I hear from clients is concerned with tradespeople and the building industry.
It is no secret we have seen building materials costs increase dramatically, whether that be first hand at retailers or hearing whispers of builders struggling to stay afloat or having to requote jobs they have already quoted.
This isn’t isolated to the building industry, you may have noticed things increasing at the supermarket or the lifesaving staple of your take away coffee!
This brings concerns of hyper-inflation. This is essentially when things increase in cost and wages/income don’t increase with it. If these all increase together there is less reason for concern because the general public can afford the higher cost of everything as their wages have increased with it.
Arlan Davine
Financial Planner
Without using a crystal ball, we can rely on what we are observing, at the moment, and it is still possible for it to go either way. It does seem that wages are experiencing growth alongside the cost of living thus far (which is what we are also seeing in the United States). What makes it really hard to predict is the simple fact that this can change very quickly.
Most economic commentators are predicting a slowdown/stagnation in housing prices, but that doesn’t mean construction will cease all of a sudden and it’s to be expected after such incredible growth.
It is expected we will see the central banks raise rates enough to reduce economic growth. Creating a recession (which is preferable to hyper-inflation), but still seems to be quite some time off.
As it stands, there isn’t a huge need for concern and you don’t need to take all your savings and hide them under your bed, but it is always worth talking to an adviser if you have any questions and to stay up to date!
For more information visit our financial planning page or contact one of our financial planning team members.
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