Lighting and the economy
Shanghai, 16th March 2010
Now there is a loaded word, the “economy”!
I arrived in Shanghai this morning and am always astounded by the amount of work going on. Many parts of the upcoming Expo site are still looking far from finished but I am sure they will turn it around in time. This country has managed to keep its economic growth well above 5% even in the darkest recent recession times. How much the figures are inflated I wouldn’t know but you just have to be here to see that things are moving!
What I always find hard to understand though is how prices always seem to be going up. House and land prices, car prices, energy prices, food prices, transport prices. Why does it never go down? Yes there are so called market corrections, but historically costs keep going up. It affects us because as a result the salaries keep rising, our overheads keep rising. Thus we increase our fees again.
These increasing costs affect the lighting manufacturers as well and thus the lighting budgets of our clients. It is not only the cost of labor but also the costs of material components. To my understanding the cost of producing only goes down after the machinery and production equipment costs have been written off. That is why we are looking at reduced costs of LED in the near future, but I bet you that in the long run the costs of LED will rise again in line with our general costs f living.
Note I am not an economist or financial analyst, which probably shows (just trying to make sense out of it all :)) …but wouldn’t it be interesting if things would become really cheaper over time?