Steve Faragher takes a look at the latest McKinsey report, and breathes a sigh of relief that it shows optimism is embracing the sensible middle ground.
The heat has come off global optimism, thank goodness. The latest McKinsey report suggests that 71% of executives polled around the world expect the global economy to improve in the next six months, down from a staggering 81% in June.
The main change has come in the developed countries, where optimism has cooled off significantly, from 83% in June to what at least seems a far more reasonable 65% now.
That, of course, is what respondents imagined happening to the global economy going forward. Just to underline that these are people, after all, and patriotic ones at that; when asked whether their own country is going to have a good next six months, 78% believe that will be the case.
What do these figures mean? I suggest they mean a more realistic, tempered view of our way out of this pandemic is becoming established. The report also backs this up, suggesting several exit scenarios to see which the polled executives believe to be more plausible.
Most of the respondents seemed to believe that the version of events most likely actually to occur is the one with continued recurrences of the virus and slower near-term growth. That certainly ties in with our more recent experiences in the UK, which is why I welcome it.
This new middle-ground optimism is surely more sensible than the rather wild, fixed-grin optimism that the UK government in particular has been sporting for the past few weeks. That look that says we don’t know what we’re doing but we’re sure it’s going to go well—no, honestly?
If they have, in fact, lucked upon the moment at which herd immunity starts to kick in and Covid figures start falling as a consequence, then well done them, but I think the majority of us—as borne out by McKinsey—still believe that there’s plenty of viral pain yet to come before the all-clear can be sounded with any real conviction.
So what about the gun trade? Should we be optimistic? Certainly recent performance would suggest so. It’s notoriously hard to get accurate figures from the trade (we’re a secretive bunch for some reason) but, anecdotally, when the chairmen of leading luxury shotgun brands and pile-’em-high, sell-’em-cheap air rifles are both saying the same very contented things about their past year in private to me, I get a good feeling for the industry.
I welcome middle-ground optimism in the sense that I think we all need time to breathe and rebuild a little but, actually, if there is a message from this pandemic, or indeed the roller-coaster ride of Trump to Biden, it’s that guns sell well when the majority view is not an optimistic one; typically, guns love a crisis.
Traditionally—and certainly in the US—that’s been considered to be a self-defence issue. “The wheels are coming off the planet, I’d better get a gun to defend myself,” is something that speaks to powerful frontier ideologies forged in the birth of that nation. But the story here in the UK is not that, although the results are remarkably similar. I do not for a second believe that people are buying £100,000 shotguns nor £100 air rifles to defend themselves with, so the reasons are clearly more complex.
With air rifle sales there may be a survivalist element in wanting to supplement the pot with putative squirrels but, mostly, I think the sales are a consequence of boredom, and the opportunity to do something exciting and possibly new without having to leave the backyard is a promising one, sympathetic to lockdown.
It’s also clear that while there have been too many losers in this pandemic game, some of us have been winners, with diminishing outgoings and consequent savings accumulated. I reckon I’ve saved £3,000 simply by not running a second car this year, and more by doing far less mileage in my principal vehicle.
The other good news from McKinsey is that its polled executives no longer think that unemployment will continue to rise. To some extent, of course, that is because the damage is done. But it remains good news, suggesting that the measured confidence in growth is actually pretty deep. No increase in unemployment is a brave call at the moment, but one that 73% of the world’s executives are prepared to make.
Some of that optimism around unemployment may have come from the closing of borders, something that, conversely, has had a significant impact on our ability to do business. With no free movement of labour across land masses, local populations are getting the opportunity to display their flexibility and fill jobs it had long been supposed they were no longer interested in, crucially when the price became right. The other side of that coin is that some of those increased labour costs have combined with much greater importation costs effectively to sound the death knell for several small businesses.
We all know someone, usually a fairly niche enterprise, that has gone to the wall in the past few months, blaming Brexit, border taxes or rising employment costs—or a combination of all three; there are business models that have simply stopped being viable. In terms of survivors and thrivers, it certainly feels as if it is the more diverse among us who are guaranteed to be doing the better business.
At the Game Fair I met a shopkeeper who told me that he closed his shop within three weeks of Covid hitting, made the move to 100% online and has never looked back. I wonder how the Game Fair was for him—whether it was a great opportunity to engage with his buying public again or a waste of money with sales little greater than that which might have been achieved from home.
It will be fascinating to see, as we climb our way slowly and cautiously back into a post-pandemic world, whether the matter of bricks or clicks has been settled once and for all, or whether we might see a resurgence or a complete reinvention of the role of the traditional gunshop going forwards. Whatever happens, consumer—and executive—confidence, remains high, but thankfully not unrealistically so.