Inflation, war and climate catastrophes were cited as potential brakes on a rebounding economy by headline speaker Nicki Hutley at the APPMA member dinner event in Sydney this week, but overall, her message was upbeat.
Hutley – a renowned economist – said the resilience and agility of human beings, when combined with optimism, pointed to a bright future for the domestic and global economies.
Some 100 APPMA members braved torrential rain and flooded roads for a convivial evening of networking, fine food, and an in-depth assessment of the economic outlook by Hutley at a Darling Harbour hotel on 8 March. (Scroll through the image gallery above to see some of the attendees.)
APPMA president Mark Dingley opened the evening, which took place on International Women’s Day, calling on members to encourage female participation in what is one of the more male-dominated industries. He pointed to APPMA itself, which now has two female board members and a female company secretary, as an example of progress.
With the rain pounding down outside, Dingley said APPMA stood ready to help all packaging and processing companies impacted by the floods, with technical support and even loan equipment. APPMA will also be working with local charities to help with recovery projects.
Dingley revealed that APPMA itself had grown significantly over the Covid period, with membership up to 135 compared with 95 in 2019. He cited the success of the association’s marketing through initiatives such as the Machinery Matters online and print publication that goes out in PKN Packaging News and Food & Drink Business as one of the reasons for growth and increased member participation.
AUSPACK is the major topic for APPMA at present, and Dingley said the show, due to take place in ten weeks’ time, is 85 per cent sold, with 200 exhibitors signed up, and visitor registration numbers tracking above the 2019 event.
He spoke also of a future for AUSPACK beyond the 2022 show, which would see it transition into a broader all-of-industry event by 2024.
OPTIMISM IN A WORLD OF UNCERTAINTY
Hutley started her talk by addressing the impact of Covid, noting that the Australian economy was in much better shape than most other countries.
“Australia might not have got everything right along the way, but overall, we've done remarkably well. There has been a vast fiscal injection in Australia, at all levels of government,” she said.
Hutley said that Australian households were flush with savings – “a so-called war chest of around $200 billion” – which they would now begin to spend. She warned, however, an upswing in online purchasing would lead to a corresponding upswing in cybercrime.
Commenting on the waves of volatility caused by lockdowns, and variations in sector performances, she noted that activity across regions also varied enormously.
She reeled off a host of stats that she said showed a “nation of remarkable resilience” and said that as life normalises we are likely to see less of a “patchwork economy” across states, territories and sectors.
She told the crowd that the French expression Plus ça change – ‘the more things change, the more they stay the same’ – was apt for Australia, for “while the pandemic has been a wild ride the fundamental structures and its challenges remain largely unchanged”.
Ultimately, however, as things normalise post-Covid, the fiscal stimulus will be reversed and act as a drag on activity, according to Hutley, but she said with an election looming we can be sure that the government won't be pulling the purse strings too tightly just yet.
Looking at economic risks ahead, Hutley said interest rate rises are a certainty, but unlikely until the final quarter of this year or first quarter of 2023, in her estimation.
She described the war in Ukraine as a “curve ball” in economic terms, saying that Russia is in a financial crisis with recession “all but guaranteed” thanks to sanctions. The fallout for oil and other commodity prices is of some concern, she said, but Australia will be cushioned to some degree by the rising Aussie dollar. Although inflation rises predicted in Europe could have some flow through, overall it would have only limited impact on the Australian economy, she said.
Hutley then moved to climate change, which she said was the third big risk for the economy, but said the idea that action on climate change was bad news for the economy was not a complete or accurate narrative, and cited various examples of why investing in green power was economically beneficial.
“The economic message is clear: inaction comes with inconceivable costs to lives and livelihoods – you only need to look out of the window [where rain continued to bucket down] to see this – while action leads to new and sustainable economic opportunity,” she said.
Hutley ended her presentation talking directly about packaging, saying that while it can help solve the problem of food waste, plastic was “in the spotlight”, with last week’s UN resolution to forge a legally binding agreement by 175 countries to end plastic pollution in two years’ time the latest in a long line of demands on the packaging industry. She said consumers have “shown far more willingness” to change their behaviour than corporates and said that food’s origins, its processing and packaging, will be under the microscope, demanding more of the packaging supply chain, but she said early movers into green initiatives would be rewarded by consumers.
Hutley took a few questions on the outlook for local manufacturing, which she said would have to focus on innovation as labour costs were too high to compete on mass production, even if we wanted to, and on the outlook for workers as automation increased, which she said had always been positive.
Dingley wrapped up the formal part of the evening, thanking Hutley, inviting the crowd to enjoy the food and beverage on offer, and to take the opportunity to network, which they duly did.
