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Speaker 1: Now economists are a little bit worried about the number

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Speaker 1: of businesses posting a loss. IID data from the twenty

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Speaker 1: twenty three tax years showed one in five businesses made

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Speaker 1: a loss. That's one hundred and seven businesses, one hundred

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Speaker 1: and seven thousand businesses obviously in total. Gareth Kennan is

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Speaker 1: Infametric's chief forecast Hey, Gareth, evening Heather, Now, it's a

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Speaker 1: bit of debate about these numbers. Is it one in

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Speaker 1: five or is it actually one in three?

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Speaker 2: Well, there's about a third of businesses when you look

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Speaker 2: at those numbers that record it neither a profit nor

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Speaker 2: a loss zero and comes. So my feelings those ones

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Speaker 2: should probably be taken out of the numbers because it

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Speaker 2: looks like they're not operational, probably not even you know,

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Speaker 2: sort of a real business in a sense. So you

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Speaker 2: probably get a better steer just looking at the numbers excludized.

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Speaker 1: Ones, and that takes us to what one in three?

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Speaker 2: Yes, sense right?

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Speaker 1: Yeah, Okay, Now tell me you understand this better than

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Speaker 1: I do. But if we have an increase in the

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Speaker 1: current loss share from thirty two point three percent to

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Speaker 1: thirty four point six percent, that doesn't seem that bad.

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Speaker 2: No, I mean I was surprised by the sort of

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Speaker 2: lack of movement and the numbers. When you look at

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Speaker 2: the data over the last seven years, they haven't really

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Speaker 2: swung around a lot. The changes seem to be pretty marginal.

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Speaker 2: The other thing that surprised me is the fact that,

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Speaker 2: you know, you are talking a third of businesses that

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Speaker 2: are making a loss in any given year, and you

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Speaker 2: would hope that across the economy overall, that things were

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Speaker 2: a little more profitable when times were going good. But

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Speaker 2: it doesn't seem to be the way the numbers work out.

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Speaker 1: Now, why would it be that it hasn't got given

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Speaker 1: I mean, we are talking about having a recession. Some

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Speaker 1: say is the worse than thirty years, some say the

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Speaker 1: worst than fifty years. Whatever it is, it's bag. How

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Speaker 1: come it hasn't gone up more than that?

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Speaker 2: Look, it may just be a reflection that there's sort

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Speaker 2: of an uneven distribution across you know, companies making losses.

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Speaker 2: We don't know how big those losses are, and they

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Speaker 2: might have been quite previous years and there might be

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Speaker 2: more loss making going on. So you know, it's a

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Speaker 2: case of I guess having to look at some of

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Speaker 2: the other indicators around how businesses are performing out there

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Speaker 2: as well, and just trying to get a steer on them.

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Speaker 2: But you know, over the last two years, those numbers

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Speaker 2: at least suggesting there are more businesses making a loss.

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Speaker 2: So it is consistent with the deterioration and the economy

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Speaker 2: that we have seen.

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Speaker 1: Is it possible that, because this is the twenty twenty

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Speaker 1: three to twenty four tax that actually we're not seeing

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Speaker 1: the ugliest stuff yet.

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Speaker 2: Yeah, that's right. I mean when you look at the

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Speaker 2: numbers and the way the economy performed, it was kind

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Speaker 2: of flat through twenty twenty three through that, and so

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Speaker 2: that's still been captured in the twenty four year, like

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Speaker 2: you say, And the worst of that recession we know,

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Speaker 2: was through the middle part of last year, so in

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Speaker 2: the twenty twenty five tax year. So it could well

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Speaker 2: be that over the next twelve months or so, as

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Speaker 2: we get more data through you do see more of

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Speaker 2: a deterioration and those figures coming out.

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Speaker 1: Yeah. Now, we have been spending a lot of time,

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Speaker 1: because everybody's feeling gloomy in the middle of winter and

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Speaker 1: feeling a bit poor, We've been spending a lot of

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Speaker 1: time just thinking about the economy. What is your forecast

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Speaker 1: for when we start to feel decent about what's going on.

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Speaker 2: Yeah, Look, the one thing that's really holding us back

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Speaker 2: as far as I'm concerned is the labor market. You know,

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Speaker 2: we were hoping that the unemployment rate would peak in

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Speaker 2: them this year and start to track lower. We've pushed

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Speaker 2: out the timing on that, but the real concern for

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Speaker 2: me is when you look at things like job ad

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Speaker 2: numbers or monthly job figures, they've gone sideways for the

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Speaker 2: last year or so and there's not really any sign

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Speaker 2: of an improvement there. And my feeling is that until

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Speaker 2: you start to get that labor market turning around, until

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Speaker 2: there's an improvement in people's sense of job security and

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Speaker 2: income security around that, even though interest rates have been

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Speaker 2: coming down and people of not having to pay as

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Speaker 2: much on the mortgage, they will still be cautious on

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Speaker 2: their spending for some time. So it could well be

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Speaker 2: into late late this year or early twenty twenty six

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Speaker 2: before that household spending starts to pick up, and of

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Speaker 2: course at that time we should start to see more

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Speaker 2: spending coming through in provincial areas. With the good export

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Speaker 2: prices that we've had as well.

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Speaker 1: Good stuff, Gareth, Thanks for your time. Gareth Kenan, Informetric's chief, forecasted.

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