Letter: Blinkered economy

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The Independent Culture
Sir: It is now well recognised that in many service industry areas there is overcapacity ("How is it that all these gloomy businessmen are employing more people?", 4 February).

There are too many shops, getting to be too many complexes, too many pub chains expanding simultaneously. If you overexpand capacity it is not surprising that surveys show gloom, even after adjustment. The jam is spread more thinly, sales and profits fall, and depression takes a hold.

Add to that the continual surveys telling consumers that prices are too high and you must expect consumer resistance.

It is getting to an Asian state of mindless overexpansion without a rational look at markets.

Look at the population figures. In 2001 there will be 1.8 million fewer 20 to 29-year-olds than in 1991, a 20 per cent fall in 10 years. There is growth in the 30 to 59 bracket, but virtual stability in the numbers of OAPs.

All these new service industries, shops, pubs, multiplexes, seem not only to target younger customers, but need a young and vibrant workforce, and both areas are declining.

More alarming is the apparent indifference of the business community to population changes. Over the next 20 years the numbers of workers aged 20 to 44 declines, with an increase in older workers. But the numbers of pensioners and the very elderly escalate rapidly. There is virtually no sign that business has begun to realise that over the next 20 years service industries needs to make major adjustments.

All one can see is a set of developers who apparently operate with a herd-like mentality and are locked in the past.