Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, April 08, 2015

Oil Plunge Hurt 'Other' Parts Of Economy: Bank Of Canada

OTTAWA - The sting of lower oil prices has dampened the confidence of companies when it comes to future sales growth, investment and hiring, the Bank of Canada's latest business outlook has found.

The central bank's quarterly sampling of 100 representative businesses, released Monday, suggested cheaper crude had even eroded sales expectations among firms beyond the energy sector, such as those down the supply chain.

"More businesses than in previous surveys anticipate an outright decline in sales volumes," the document said.

The survey, conducted between Feb. 17 and March 12, also found dimmer expectations about future investments in machinery and equipment for the coming year, particularly among companies in the goods sector and those hit hard by lower oil prices.

The influential questionnaire of senior managers also found the outlook for hiring had diminished to its lowest level since 2009.

"Hiring intentions are weaker for most sectors and regions, but especially for firms tied to the energy sector, which plan to reduce the size of their workforces in light of lower oil prices," the report said.

Expectations for hiring, sales and investment were higher in the bank's January survey, which was conducted between Nov. 17 and Dec. 11 as world oil prices plunged. Since then, crude prices have stayed low.

This was the central bank's first business outlook survey since governor Stephen Poloz surprised markets in January by cutting the key overnight interest rate. At the time, he said the move was "insurance" against the anticipated economic impact of falling oil prices.

Crude is currently trading around US$50 a barrel — down from a summer peak of about US$107.

BMO chief economist Douglas Porter said he didn't believe the "sluggish" results of the outlook survey increased the odds Poloz would introduce another cut at next week's rate announcement.

"While we don't dismiss the chances of such, it will take some significant new disappointment to advance the cause," Porter wrote Monday in a note to clients.

"The oil price slide impact is a little bit louder and a little bit worse."

The survey also found a growing number of companies expected lower input costs because of cheaper oil prices, though some anticipated the lower Canadian dollar would partially offset those gains.

The bank said more businesses expected the weaker exchange rate to help boost output prices over the coming 12 months.

The survey's outlook for the U.S. economy was strong, with most companies anticipating Canada's biggest market will help boost future sales.

Several firms reported foreign demand had increased thanks to the weakened Canadian dollar. But the survey said many businesses only expected some of the benefits from the exchange rate and cheaper crude to surface gradually.

In a separate report released Monday, the central bank found overall business-lending conditions were largely unchanged in the first quarter of 2015 — except for firms in the battered oil-and-gas sector.

While energy companies experienced a tighter lending environment, borrowers in other sectors reported that conditions remained "highly accommodative," the bank's senior loan officer survey found.

The survey also marked the first time the bank released results of its questions on the intensity of labour shortages.

In Monday's report, it said reported labour shortages were "less intense" compared with a year earlier, especially for firms operating in industries and regions connected to the energy sector.

Original Article
Source: huffingtonpost.ca/
Author:  Andy Blatchford

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