Supply side's resilient performance

Dateline: 24.02.2009
Author: Gerry Goldberg

In light of the negative comments being made continuously by much of the media, certain economists and certainly by some politicians regarding the direction of the economy, it seems strange that so many members of the cleaning industry continue to make positive comments about their respective companies’ states of play.

In fact it is very rarely that I have heard anything negative at all and most suppliers, whether wholesale or retail, appear to be happy with sales and profitability over recent months. Every member of the NCSA I have spoken to about this issue – and I have spoken to many - seems puzzled at what is happening.

True, I do get some comments suggesting that certain industries or particular market sectors are struggling a little. It has been suggested that the mining industry is pulling in its horns and it would be most surprising if that were not to be so. And some who deal with hospitality and particularly with tourist accommodation comment on some contraction of sales there.

On the other hand I hear comments that, while, for instance, restaurant customers are appearing to be having a tougher time, other sectors of the catering trade, particularly fast food outlets, are doing well. That may signify a switch by customers to more take-away food and less eating out as a result of suggestions being made that times are getting tough, inducing a desire to save on expenditure.

But, on the other hand, the remarks made to me are that those sectors make up only a percentage of the total sales of those suppliers. Overall, with sales in other sectors holding up well, they see little difficulty with their present positions and do not anticipate a massive downturn, as some commentators insist is going to happen.

Interestingly, when any supplier CEO has told me of difficulty with specific customers insofar as payment or financial difficulty is concerned, it is also pointed out that those difficulties were in the making prior to the start of the current economic position. As one CEO said to me, “I have had one company go bust on me and catch me for a fair sum but that started in September, long before there was any suggestion of imminent difficulty in our economy.”

Of course, there have always been companies that have run into difficulties even in good times. Such difficulties occurring now should not be taken out of context and instantly ascribed to so-called difficult times. Companies will fail whatever the economic circumstances. By and large the cleaning supply industry appears to be holding up very well. Of course, there may well be some who may be feeling the pinch to some degree but none that I have spoken to that have suggested that failure is imminent or that they are worried about failure.

This positive outlook is welcomed and confirms what happened in the 1980s and 1990s’ downturns when the cleaning supply industry did particularly well overall and proved itself to be pretty recession-proof and resilient.
www.ncsa.org.au

*Gerry Goldberg is the National Cleaning Suppliers’ Association’s national president

Supply side's resilient performance