Falling A$ will mean expensive surfing next year?

[AlbyAl]

Any of youse surf industry types know what will be happening to the cost of surfboards, wetties, surf gear in general? The falling Aussie dollar means all imports are going wayyy up soon. Trips O/S too of course.

I'm not sure what import component costs are involved in boards, wetties etc. Neoprene from Japan? Should I be buying wetties now if I can before they go up next year? Petro-chemicals are cheaper if we look at the falling cost of oil, but the Aussie dollar sliding soaks up some of that gain. (at the pump too) I just bought a new Teev to beat the predicted 40% extra from about Feb. March.

Any surf boffins have it figured?

[oldman]

Not a surf industry type or a boffin, but the biggest thing will be the cost of travel AA, and the exchange rate when you get there.

It's unlikely that the general cost of commodities bought in Australia will change significantly. Not much point in trying to load up there. One of the reasons that the aussie dollar is weaker is because commodity proces are weaker. Our commodities are their inputs.

Honestly, even the money market gurus are nonplussed about the way the aussie dollar has been mauled. The currency of economies on the verge of bankruptcy (Iceland) are being treated better than the aussie. It makes no sense at the moment and could swing substantially up or down.

[wanto]

not limited to surfing, but my general theory follows:

domestically, everything will briefly get more expensive as a knee jerk reaction to the new costs of doing business, then prices will slump as sales taper off forcing businesses to tighten their belts and reduce their prices back to a reasonable level according to demand, which will likely be higher than what they were 3 months ago. this is inflation in fast forward. if 'cost of living' items such as interest rates/rents, food and petrol slump (which they probably will and already are) then there will be greater inflation, ie you'll be paying more for less because the demand mentioned earlier will be stronger.

overseas travel will be determined by the au$ compared to the currency to which you are travelling, which i'd imagine/hope can't get much worse than now!

feel free to contradict me, i'm just guessing here.

[barstardos]

We are getting hammered in the travel industry. A perfect storm of rising costs in the destinations, collapsing dollar and economic slump.
Thankfully the domestic travel business will do well at the expense of outbound.
To put that in to context - For my own personal travel - I have given up on hawaii this year and will do WA instead.

[bro]

Prices will go up although timimg will be the issue and what happens with the dollar.

There is no need for the dollar to be where its at currently as there are no market forces driving it so low mostly panic in the market driving the dollar down, so in theory it should bounce back, to what level tho no one knows.

At this stage from an industry perspective prices are set out to about June/July next year so unlikely there will be price increases before then even tho that product was probably costed at .85, it was sold with an RRP that can't be reversed regardless of $ fluctuations.

So it seems the next 6 months are key to the long term pricing strategy of the brands altho it is pretty certain what is sold to the retailer in the next 4 months for delivery in the next 10 months will see prices go up as it will be costed at a lower dollar rate, if this makes sense?????

[dUg]

I tend to agree with wanto and bro, in that the RRP for all summer 2008 and winter 2009 ranges are set and won't change in that timeframe. So prices of stuff like wetties, sunnies, clothes, removable fins etc. will most likely remain static.

Boards and trips to exotic locations are bound to see some effects, however, this will probably be offset to a fair degree by falling demand as people tighten their belts.

It's already looking like a pretty subdued pre-xmas season in almost retail sectors, so I think price rises would be viewed as counterproductive.

[Trev]

not limited to surfing, but my general theory follows:

this is inflation in fast forward. if 'cost of living' items such as interest rates/rents, food and petrol slump (which they probably will and already are) then there will be greater inflation, ie you'll be paying more for less because the demand mentioned earlier will be stronger.

You've confused me here, Wanto. If the price of the above items drops, shouldn't the cpi also drop...and therefore inflation?

[Trev]

I tend to agree with wanto and bro, in that the RRP for all summer 2008 and winter 2009 ranges are set and won't change in that timeframe. So prices of stuff like wetties, sunnies, clothes, removable fins etc. will most likely remain static.

How does setting a RRP months out prevent you from revising it? Certainly in the automotive parts industry, prices are generally set as the goods arrive, because most are not paid for (generally in $US) until the container is cleared and a DD is calculated on the exchange rate on that date. Then the importer sets his prices accordingly. He generally leaves them at a pre-arranged level and absorbs the usual fluctuations but if things get out of hand he just advises of a price rise and puts out a new price list which is dated "as at" "not prices valid 'till"

[wanto]

not limited to surfing, but my general theory follows:

this is inflation in fast forward. if 'cost of living' items such as interest rates/rents, food and petrol slump (which they probably will and already are) then there will be greater inflation, ie you'll be paying more for less because the demand mentioned earlier will be stronger.

You've confused me here, Wanto. If the price of the above items drops, shouldn't the cpi also drop...and therefore inflation?

i'm referring to the inflation of non 'cost of living' items.

surely you've heard the reserve bank talking about inflation as it's rational for increasing interest rates - the effect is that there is less disposable income, therefore less to spend on luxuries, therefore less demand, therefore less inflation.

so the theory goes, if overall 'cost of living' decreases, people have more disposable income and inflation increases.

remember that this is secondary to the cost of doing business which is closely associated with the low value of the currency. this is more likely going to be a driver for higher prices in the short term.

does that make more sense?

[Trev]

not limited to surfing, but my general theory follows:

this is inflation in fast forward. if 'cost of living' items such as interest rates/rents, food and petrol slump (which they probably will and already are) then there will be greater inflation, ie you'll be paying more for less because the demand mentioned earlier will be stronger.

You've confused me here, Wanto. If the price of the above items drops, shouldn't the cpi also drop...and therefore inflation?

i'm referring to the inflation of non 'cost of living' items.

surely you've heard the reserve bank talking about inflation as it's rational for increasing interest rates - the effect is that there is less disposable income, therefore less to spend on luxuries, therefore less demand, therefore less inflation.

so the theory goes, if overall 'cost of living' decreases, people have more disposable income and inflation increases.

remember that this is secondary to the cost of doing business which is closely associated with the low value of the currency. this is more likely going to be a driver for higher prices in the short term.

does that make more sense?

Yes but. The increase in the cpi over the last few years (which the Reserve Bank uses as an excuse to increase interest rates) has been largely due to unusually high increases in particularly fuel and rents. This then becomes a self fulfilling prophesy. Increases over the last couple of years have in my opinion, done more to highlight a questionmark over how the cpi is calculated than to combat inflation.
I agree if people have more disposbale income, they'll spend it, often on "luxury" items which damage our balance of trade (surplus).
The major shortcoming of the cpi is being shown up right now - it's several months behind the real world (and I uderstand why that is) but at the moment, the real world is moving so quickly, everything is out of kilter.

[chopescahrger]

trevg
u no that if interest rate were higher now the aussie dollar would still be up in the 80's
more return for those who invest in asutralia
personally i think it is a great oppurtunity to support our local surfing/bodyboarding industry.
instead of buiyng an importted billaripsilver wettie buy a void, ebb or agent 18 wettie aussie owned aussie made, probably chesper when the big oversea's raise there price's as they do not have to be imported.
also just supporting local brands and shapers will be good for aussie's and the industry as we would not have to rely on exy imports.
and maybe due to a drop in demand of the international importers they may lower their prices to increase demand and profit
just and idea

[Trev]

trevg
u no that if interest rate were higher now the aussie dollar would still be up in the 80's
more return for those who invest in asutralia
personally i think it is a great oppurtunity to support our local surfing/bodyboarding industry.
instead of buiyng an importted billaripsilver wettie buy a void, ebb or agent 18 wettie aussie owned aussie made, probably chesper when the big oversea's raise there price's as they do not have to be imported.
also just supporting local brands and shapers will be good for aussie's and the industry as we would not have to rely on exy imports.
and maybe due to a drop in demand of the international importers they may lower their prices to increase demand and profit
just and idea

I've always supported local board manufacturers. However, there are quality and convenience issues when it comes to wetsuits. As documented elsewhere on this site, I've used O'Neill for years because they've always had excellent service.
The issue of supporting locally made/grown is probably worth its own thread but, with prices going the way they are and the need to be careful with money I am finding it more and more hard to support local in the supermarket. Doing so can add up to 20% to your grocery bill - which is a catch 22 situation, but that's the way it is.
I long ago stopped buying Australian made clothes. Couldn't find any.
All of which brings into question the whole approach to Australian manufacturing and technology.

[Butts]

Impressive gentleman...........impressive

Would one of you bastards like to come round to my place and explain the principles of responsible fiscal management in relation to the troubling economic times we are heading into to my wife

She sure as f##k won't listen to me and most of you leave me for dust in the clear and concise department..........

Firstly, TAKE THE CREDIT CARD AWAY from her

[Trev]

Impressive gentleman...........impressive

Would one of you bastards like to come round to my place and explain the principles of responsible fiscal management in relation to the troubling economic times we are heading into to my wife

She sure as f##k won't listen to me and most of you leave me for dust in the clear and concise department..........

Ringers, there are some things a woman just doesn't compute - like money - like map reading - like football - like cars.

OK. I'm pretty much dead now.

[mr vic]

you better hope you are unknown to the mrs on this website trev

this low dollar is theoretically good news if your an exporter in aus

[Trev]

this low dollar is theoretically good news if your an exporter in aus

also good if, like my daughter, you are coming back from the UK with a bank account full of UK pounds.

[mr vic]

and for me when i return with a bank full of euros

[Trev]

[quote="Ringmaster

.....and Trev.......much as I love her, I can DEFINITELY tick the map reading, car and football boxes as well

She can't get at the AXA investment fund we've got (unless I'm dead) but that's probably just about f##ked now anyhow [/quote]

I'd worry about that "dead" bit if I was you.
Seriously though isn't it odd how we can love these strange human beings with none of the basic life skills. To be fair, my wife is extremely responsible with money (unlike my previous one), and can actually find her way around a map. Although there's a funny story there. One time we were in England and I plotted out a route from Cambridge to Oxford, taking a slightly northern loop to try to stay away from the north of London traffic. However she thought it would be shorter to go straight across. After two hours stuck in a midday traffic jam in some small village she admitted what she had done.
Now if I could just get her interested in cars, footy and surfing :?