BY JOHN ELLIS, FINANCIAL ADVISOR
The World Economic Forum finished last week and there is a plethora of reports available on their website on the theme of ‘co-operation in a fragmented world’. The reports show how the world today is at, they say, “a critical inflection point” and the sheer number of ongoing crises calls for “bold collective action”.
The reports examine agriculture food and beverage, cybersecurity, climate change to digital inclusion and more, all covered in the Global Risk Report 2023. In spite of all the media attention on climate change and in spite of the idea that we live in a fragmented world, there is a general consensus both business, and personally, worldwide that the No. 1 global short-term risk on people’s mind. Even in the rarefied atmosphere of Davos, is the cost-of-living crises, ranked No. 1 and 15th in long-term global risks.
This is reflected in the mood of businesses and families the world over. According to a recent Peninsula report covering many countries including Ireland, the main goal of many businesses including Ireland is not climate change and our carbon footprints but “to survive”. Moira Grassick, Chief Operations Officer at Peninsula Ireland, says: “It’s truly staggering that we’re going into 2023 with a third of businesses saying their main goal is just to survive the year.”
The statistics in the report clearly demonstrate the drastic impact that recent world events have had; a global pandemic, political turmoil, war in Ukraine and now a recession coming in such quick succession, devastating many businesses, especially SMEs. Business owners are under pressure like never before. They are being squeezed on all fronts with increased labour costs, the rising cost of living, the cost of just doing business and rising energy prices remaining the biggest concerns for an overwhelming majority of employers in 2023.
Families in Ireland are no different than those the world over. According to the recently published ‘The IKEA Life at Home Report 2022’, 46% of people in Ireland claim the state of the economy is their greatest concern, with household finances (38%) close behind as inflation continues to soar.
Despite outranking the worries of climate change, 29% agree that the rapidly changing environment is still weighing heavily on their minds. Yet, even with these significant issues so present, it’s, believe it or not, the small challenges around the home, like finding room for recycling bins, that can feel like deal breakers when they stack up.
Increased living expenses, according to the report, points to significant impacts on life at home looming on the horizon. More than 44% expect to cancel or postpone home improvement plans, while 21% are worried about job security. The cost-of-living crisis is also likely to affect major life moments, with almost 11% anticipating its impact on getting married and having children.
The outlook for peoples’ day-to-day quality of life is equally concerning, with exactly half of those surveyed expecting their hobbies and interests outside the home to be negatively impacted as wallets empty. This could indicate a potential ‘financial lockdown’, with more than 31% having faked excuses so they can avoid going out socially, increasing to four in 10 among young people.
Katie McCrory, who leads the Life at Home Report at IKEA, says: “After years of enforced lockdowns, now followed by a cost-of-living crisis, people will likely feel the need to stay at home once again to save on costs.”