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Fears of global recession continued to hammer stock markets in Asia, Europe and North America at the start of the week. The global economic uncertainty, which has already deeply eroded Canadians` investment savings, will also cut into workers` wage increases for next year, a major Canadian economic think-tank warned. The warning was issued by the Conference Board of Canada as commodity prices, the Canadian dollar and Bay Street stocks all continued to sink, with oil prices falling more than US$1 a barrel to a 17-month low of less than $63, the Canadian dollar tumbling nearly a cent to a four-year low of less than 78 cents US, and Canada`s benchmark.
TSX index plunging nearly 760 points to a five-year low of 8,537.3. The financial crisis could result in planned wage increases of 3.9%, which was already down from actual increases of 4.2% this year, being cut by half a percentage point next year to less than 3.5%, the board said in releasing its 2009 Compensation Planning Outlook. "Even before the financial crisis began in September, organizations were projecting lower increases for 2009," said board analyst Prem Benimadhu in releasing results of the summer survey of some 400 employers. "Although companies continue to face challenges in attracting and retaining talent, the global economic slowdown has made cost reduction a top priority."
In a separate report, the board said that Canada, however, is in good shape to deal with the financial and economic crises. "The good news is that Canada has a strong macro-economic platform, which is helping us to weather the global economic storm better than other advanced countries," said chief economist Glen Hodgson in releasing the board`s latest annual economic report card. However, it gave Canada`s overall economic performance only a `B` grade and ranked it 11th out of 17, behind first-place Ireland as well as seventh-place US, and eighth-place Britain. Still, Canada was ahead of four of the other G-7 major industrial economies -- Japan, France, Italy, and Germany. "The two areas of concern in our report card are Canada`s performance on productivity growth and our integration into the globalization process," it said. Productivity growth is well below that of global leaders like Ireland, Switzerland and Norway, and the gap is growing, the board said, adding that weakness directly contributes to lower income per capita and a $6,400 income gap with the US. "To boost our productivity performance, we need a . . . nationwide productivity strategy," Hodgson said. Further, a poor ranking in foreign direct investment -- both inward and outward -- indicates that Canada is not sufficiently integrated into the global economy, it said, noting that Canada`s share of global foreign direct investment flows has shrunk to just 3% from 10% in the 1980s.
(Vancouver Sun 081028)
TSX index plunging nearly 760 points to a five-year low of 8,537.3. The financial crisis could result in planned wage increases of 3.9%, which was already down from actual increases of 4.2% this year, being cut by half a percentage point next year to less than 3.5%, the board said in releasing its 2009 Compensation Planning Outlook. "Even before the financial crisis began in September, organizations were projecting lower increases for 2009," said board analyst Prem Benimadhu in releasing results of the summer survey of some 400 employers. "Although companies continue to face challenges in attracting and retaining talent, the global economic slowdown has made cost reduction a top priority."
In a separate report, the board said that Canada, however, is in good shape to deal with the financial and economic crises. "The good news is that Canada has a strong macro-economic platform, which is helping us to weather the global economic storm better than other advanced countries," said chief economist Glen Hodgson in releasing the board`s latest annual economic report card. However, it gave Canada`s overall economic performance only a `B` grade and ranked it 11th out of 17, behind first-place Ireland as well as seventh-place US, and eighth-place Britain. Still, Canada was ahead of four of the other G-7 major industrial economies -- Japan, France, Italy, and Germany. "The two areas of concern in our report card are Canada`s performance on productivity growth and our integration into the globalization process," it said. Productivity growth is well below that of global leaders like Ireland, Switzerland and Norway, and the gap is growing, the board said, adding that weakness directly contributes to lower income per capita and a $6,400 income gap with the US. "To boost our productivity performance, we need a . . . nationwide productivity strategy," Hodgson said. Further, a poor ranking in foreign direct investment -- both inward and outward -- indicates that Canada is not sufficiently integrated into the global economy, it said, noting that Canada`s share of global foreign direct investment flows has shrunk to just 3% from 10% in the 1980s.
(Vancouver Sun 081028)