CEO INSIGHTS – Week Ending 12 July 2024

Artificial Intelligence

"I don’t think people wake up in the morning thinking, “Oh, I want to use AI.” They wake up in the morning with a job to do and they want to create that presentation or they want to brainstorm something on a whiteboard. All of those AI features are really based on trying to help create shortcuts in that process" Melanie Perkins, Co-CEO, Canva

"The IQ levels of current AI models are not as smart as a domestic cat." Demis Hassabis, CEO, Google DeepMind

"We are in the very early days of how AI will play out. If you go around Silicon Valley asking a whole bunch of VCs, what are you investing in? We are investing in AI, because we think we can make the next technology giants" Reid Hoffman, Co-Founder, LinkedIn

"In the future, there will be so much AI-generated interaction that when customers need to speak to you, that moment of truth will determine their whole perception of your business." David Tudehope, CEO, Macquarie Technology Group

Building Materials

"2021 was peak consumption of softwood lumber...2022 saw a great reset to the long-term mean, 2023 was about building a real foundation in the pricing of lumber. If you look at the last 25 years, lumber today (inflation adjusted), is approaching an all-time low. We are extremely cheap relative to the past, albeit there is room to go lower, no doubt about it." Kyle Little, COO, Sherwood Lumber

Consumer Discretionary Spend

"My June was just ordinary, nothing special. Things are tough at the present time" Arthur Laundy, CEO, Laundy Hotels

Media & Content Industry

“I think over the next year or two we're going to see some real media consolidation" David Zaslav, CEO, Warner Bros. Discovery

Supermarket Industry

“While there is competition in Australia in the supermarket space, it is still way too heavily concentrated in two main players, and that’s not just the supermarket space, but also in the liquor space and the hardware space… If you’re doing things like land banking with no intent to build a store, or paying over the odds in rent to muscle out smaller players, I think someone does need to stand up to the market bullies and say enough is enough.” Theo Foukkare, CEO, Australian Association of Convenience Stores‍

Shipping Rates

“The big issue is the shipping lines just don’t honour contracts and hence the rates have more than doubled compared to your contract rates. Clearly this will cause importers and retailers to have to increase prices. Very inflationary.” Anthony Scali, CEO, Nick Scali

“We’ve had containers sitting there for over a month, which obviously causes a lot of pressure here in Perth because cargo is arriving very late in our ports. Longer transit times means increased costs to the shipping lines, which in turn pushes the increased cost down to the end consumers.” Amanda Bradfield, Operations Manager, ESS Shipping

“We’re seeing freight rates getting higher and higher and a lot of importers now, with the uncertainty of getting freight here on time, moving away from the ‘just in time’ inventories and storing more and more onshore here in Australia” Paul Zalai, Director, Freight and Trade Alliance

Wealth

“The inheritocracy, the bank of mum and dad, it’s real. To be able to afford a house, young people are going to need help. The last of the Baby Boomers will have retired, and the oldest Baby Boomers will be starting to pass away. There’s a real bulge of the population there, and…they’re the first big group who had super. Definitely, there’s going to be a transfer.” Andrew McAuley, Managing Director, UBS Wealth Management

Australia-China Relations

“There’s been a flurry of activity since the lifting of the tariffs in terms of wine businesses in Australia quickly trying to re-establish their trade links with China. We’re no different to that. We have got our previous clients back and purchase orders are coming in.” Mary Hamilton, CEO, Hugh Hamilton Wines {Six-Generation Australian Wine Makers}

Energy

"In our view, pumped hydro will play a critical role in the future of the NSW energy system and long duration storage should continue to be a key focus." Damien Nicks, CEO, AGL Energy

Australian Housing & Infrastructure

"Australia is facing a structural housing shortfall, which is being aggravated by robust immigration as the economy continues to grow. This means more homes need to be built, and both the federal and state governments are grappling with how to bring more homes to the market faster. Along with housing, there’s a need to build out social infrastructure, from schools to hospitals and other structures, to support population growth" Benoit Bazin, CEO, Saint-Gobain (New French Owner of CSR)‍