Look who loves lockdown

More proof that lockdown isn’t fair.

So lockdowns are dragging on, dragging us through the dirt behind them.

And case numbers continue to rise. The 7-day moving average is shooting past the Melbourne outbreaks last year, and shows no sign of slowing down.

So far, the economy and our markets are holding it together. The property market in particular has been particularly resilient.

Auction clearance rates have fallen in recent weeks, although Sydney seems to have adjusted to lockdown, and the drop is largely on the back of Melbourne’s results.

And household finances are holding up for the moment. The number of people living with mortgage stress (= who are struggling to make their mortgage repayments), has moved strongly lower through the year on the back of lower interest rates, and shows no sign of turning around any time soon.

Consumer confidence has also dropped a bit in recent weeks, but we’re a long way from the panic-station levels we saw in the early days of the pandemic.

So for the moment it seems like we’ve got our heads down and we’re getting through it, although obviously the more this thing drags on, the more risk there is that the economic wheels fall off.

But I don’t see it happening.

And while lockdown is a total pain in the bum for ordinary people, you know who’s loving it?

Big business.

Well, sort of. Last week Deloitte released their survey of CFOs – Chief Financial Officers – the people who hold the purse strings at our biggest businesses.

And you know how the CFOs are handling lockdown? Pretty well actually. Net optimism is at the highest level on record!

Now, the survey is a few weeks old, but it does include the first month or so of the NSW lockdown, so it’s not a question of timing.

CFOs aren’t rattled by lockdown.

In fact, the number of CFOs who rate the level of uncertainty as ‘normal’ or ‘lower than normal’ has increased substantially.

How does this work?

What do they know that we don’t?

Well, I think the answer is that they just take a much longer view. Your average person on the street is all caught up on the daily case numbers, and whether lockdown is going to end this week or next.

CFOs on the other hand have seen how the Aussie economy handled 2020, and they know how much cash is gushing through the system right now. They know what the fundamental economic outlook looks like, once you strip out the noise of the lockdowns.

And they’re bullish.

We’re already seeing in the reporting results that big companies are delivering pumping profits.

CFOs know that there’s a tonne of stimulus in the system, and the outlook is sweet.

So let’s take a leaf out of their book.

Don’t get caught up on the daily numbers. Look through the noise.

… to the sweet times ahead.


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