On the brink of war or recession?

The question most frequently asked, perhaps surprisingly, is do I think there will be a global recession? Perhaps the question: 'will there be another world war?' is simply too dreadful to contemplate. So I address the question asked and explain that the British media have exhorted us all to go shopping to help the country's economy and prevent a recession. I am only too happy to oblige. However, thousands of airline staff are currently being laid off as airlines go broke and aviation is not the only industry which was already experiencing problems before September 11. The Arizona desert is filling up with unwanted aircraft and by October 5, 2001, it is reported that 1,150 planes had been grounded, joining an estimated 700 operational planes looking for homes. The Evergreen Air Centre in Arizona are said to be refusing to take planes which they consider unlikely to ever fly again and only want those which they will keep serviced for future use. They are even expecting brand new aircraft direct from the factory. While not all the aviation job losses are as highly paid as the pilots, nevertheless cabin stewards, maintenance and ground staff have been used to exercising a significant spending power. And as many former travellers stay at home, larger airports such as Heathrow are suffering considerable loss of business. Airports are not just a point of entry and departure; they provide shops and restaurants and car parking facilities along with courtesy buses, taxis and rail transport systems. And while the leather components in these activities may not be high, the reduced headcount represents shoe wearing, bag toting, car drivers. Car manufacturers, very important customers of the leather industry, are also experiencing a slowdown. And at the other end of the journey, there are the tourist destinations, business hotels and conference centres to be considered. The largest consumer market in world terms, the United States of America, was already experiencing an economic downturn before the tragic events of September 11. The second largest, Japan, was in recession and Europe, while relatively stable, had lost the feel good factor due to BSE and foot and mouth disease. Now everyone everywhere is preoccupied by the military action which is unfolding before our eyes and the expectation that terrorist reprisals are likely. It is difficult to conduct business in the usual way because the conditions under which we are living are far from normal. That said, while the overseas contingent at the All China Leather Fair was reported to have been somewhat gloomy, things were much more buoyant in the Chinese sector of the exhibition. The Chinese reaction to the terrorist attacks seems to have been, strangely, to revoke visas for anyone coming from India. Most events are reporting an absence of Americans, which is only to be expected in the circumstances. But longer term fears are that they will continue to stay away which is much more serious for the global economy. Both India and Pakistan have already admitted being hit by a huge drop in business as a direct result of the events of September 11. The suitcase trade in Türkiye faltered in the aftermath, pushing down prices of UK domestic sheepskins, while strong buying by China has been keeping prices up for Australian skins. Raw materials prices generally were reported as down and whereas in normal circumstances this would presage a return to normal trading as tanneries stock up, it is anyone's guess what will happen now.