Just sayin'
Here’s what former Conservative finance minister Joe Oliver said last July:
“We don’t have a recession. We don’t believe we will be in a recession. A recession is technically two consecutive negative quarters and we don’t have results from the second quarter ... We are still looking forward to renewed growth.”
And here’s what Liberal Finance Minister Bill Morneau said yesterday:
“I’d like to start by saying I’m optimistic. The good news is we have a plan ... We do believe that these measures taken together will make an important difference on growth in this country and we believe that they will enable Canadian companies and organizations to be confident enough to invest.”
Mr. Morneau is suddenly sounding defensive, as Mr. Oliver did before him. And look how that turned out.
The economic gloom is mounting by the day as the price of oil plunges.
Just yesterday, as The Globe and Mail’s Barrie McKenna and Bill Curry report, a new Bank of Canada survey showed that the hiring and spending plans of companies across the country are the worst they’ve been since 2009.
Let’s flesh that out a bit by looking at the chart below.
“Skewered by the relentless decline in energy prices, Canadian business capital spending plans keep ebbing,” said Bank of Montreal chief economist Douglas Porter.
“In the BoC’s latest business outlook survey, a small majority of firms now plan on reducing investment in the coming year. That’s a rarity, outside of recession periods.”
Bank of America Merrill Lynch is also gloomy, so much so that it now expects the Bank of Canada to cut its benchmark rate again next week by one-quarter of a percentage point to just 0.25 per cent.
“Even a moderate 10-per-cent drop in energy production would cut GDP by 0.8 [of a percentage point],” said the bank’s North America economist, Emanuella Enenajor.
We know what the Liberals are planning, generally, but we don’t have the details, which would come in the next budget, whenever that might be.
We’re talking about words here. The Liberals have promised stimulus, while the Conservatives were more concerned with balancing the budget despite the gloom.
But Mr. Morneau might be wise to share his reasons for optimism sooner, lest a certain mentality set in.
He need not sound defensive given that he only just inherited this economic mess, and there’s nothing he can do about the price of oil.
But he need not offer platitudes, either. Any Joe can do that.
Lululemon up
Shares of Lululemon Athletica Inc. are climbing sharply in premarket action after the yoga wear’s financial update late yesterday.
The stock is up more than per cent heading into the Nasdaq open.
Lululemon updated its outlook ahead of an investor presentation today.
It now sees fourth-quarter revenue of between $690-million (U.S.) and $695-million, a hefty jump from a year earlier and better than its earlier forecast of up to $685-million.
Lululemon also projects fourth-quarter earnings per share of 78 cents to 80 cents, eclipsing the earlier prediction of up to 78 cents.