We Really Could Use Your Help
Regular readers of this column will know we always try to bring an optimistic outlook to the world -- and in fact to the Canadian economy in general. There's almost always a bright side to every story...
Regular readers of this column will know we always try to bring an optimistic outlook to the world — and in fact to the Canadian economy in general. There’s almost always a bright side to every story, and we’re happy to share it.
But after researching and writing various articles lately about the state of Canadian industry, we have to admit to feeling somewhat defeated. This past week there’s been bad news, followed by seemingly worse news, every single day.
Here are some examples from reports available at press time.
In the fourth quarter of 2008, the industrial capacity utilization rate dropped to below 75%, the lowest level since this data began being monitored 22 years ago. The rate fell in 16 of the 21 major industries. Looking for a glim-mer of light, we noted that, at least in the non-manufacturing group, the forestry and logging sectors posted moderate increases.
The labour productivity of Canadian businesses also fell in the fourth quarter of 2008, by 0.5%. Productivity declined as output dropped more rapidly than hours worked. Sorry, but we couldn’t find much good news in this story.
In addition, the real gross domestic product (GDP) of Canadian businesses shrank by 1.3% in the fourth quarter, reflecting weak domestic demand and a continuing slump in exports. This was the largest decline since the first quarter of 1991.
On top of this, the Canadian dollar depreciated by 14.1% relative to its US counterpart in the fourth quarter of 2008. Canadian unit labour costs measured in US dollars decreased substantially due to this depreciation. In good times this would be beneficial to our US-bound exports whereas today it just puts more pressure on our overall economy, given the severe weakness of the US economy. Canada’s manufacturing sales in January validate this sad point: they dropped 5.4% to the lowest level in almost 10 years.
True, if you take out motor vehicles, and related parts and accessories, January’s manufacturing sales decreased a more moderate 1.2% compared with December 2008, but then constant-dollar manufacturing sales, which are measured in 2002 prices, fell 6.4% in January — the sharpest decrease since 1997. If there is relief, we owe it to the raw materials sector. For example, petroleum and coal product manufacturers reported a 7.2% in-crease compared with December. Whew!
Struggling to find another bright aspect of the economic picture, we noted that the Atlantic Provinces posted mostly positive results, with January sales up 2.3% in the region compared with December.
And digging deeper, we found a glimmer of hope among the dismal February unemployment numbers: employment in manufacturing rose by 25,000.
So you see, there’s almost always some good news among the bad, especially when you dig for it. But finding that good news is a challenge, so we’d like your assistance. Help lift the gloom by writing us with any positive stories you have — anything that makes you feel good about your business, your job, your industry or the market. Write to email@example.com.And thank you.
Bill Roebuck, Editor & Associate Publisher