These are stories Report on Business is following Wednesday, Sept. 3, 2014.
How good is your job?
A new study by the OECD finds job quality in Canada is just “average,” though it also projects unemployment levels will decline.
The findings today from the Organization for Economic Co-operation and Development, which paints a picture of the global labour market in this post-crisis era, put Canada in the middle of the pack when it comes to job quality, along with countries such as the United States, Britain and Japan.
Others deemed average include Austria, Belgium, the Czech Republic, France, Israel, Italy, Korea, Mexico, New Zealand, Portugal and Slovenia.
The reading is based on three measures of job quality, including pay, job security and the working environment. Those ranked as average mean that no more than one of the measures is in either the top or bottom 10 across the OECD, based on data from 2010 or earlier.
At the top, or those that do “relatively well” in at least two of the measures, with none in the bottom 10, include Australia, Denmark, Finland, Germany, Luxembourg, Ireland, the Netherlands, Norway, Sweden and Switzerland.
At the bottom of the least, or those doing “relatively badly” in two or more measures, are Estonia, Greece, Hungary, Poland, the Slovak Republic, Spain and Turkey.
The three measures are broken down further to include readings of inequality, unemployment insurance, and job demands and resources.
“Job quality not only affects individual well-being and that of the households in which they live, but also labour force participation, productivity and aggregate economic performance,” the study said.
Among the overall readings, “earnings quality” looked at both the level and distribution of pay, while job security measured the risk of job loss, and the expected length of unemployment, as well as jobless benefits. Working environment studied everything from how work is organized to the atmosphere of the workplace.
Of the 32 countries measured for job quality, Canada ranked fairly well in the “good working environment” category, at No. 3 for job demands and No. 10 for job resources.
But it lagged in the earnings and job security categories, ranking No. 12 for average earnings and No. 19 for inequality, and No. 17 for unemployment risk and No. 19 for insurance.
Across the OECD, the report also found, real wage gains have been “essentially flat” since 2010 and labour markets have recovered “only modestly.” Long-term unemployment, it added, is still “persistently high,” though has probably peaked.
The OECD projects that Canada’s jobless rate will dip by the end of this year to 6.8 per cent, and by the end of 2015 to 6.5 per cent.
Those compare to 7.4 per cent and 7.1 per cent, respectively, across the OECD countries. And to highlight the stark nature of the divide, the numbers for the euro zone are 11.7 per cent and 11.2 per cent.
“While wage cuts have helped contain job losses and restore competitiveness to countries with large deficits before the crisis, further reductions may be counterproductive and neither create jobs nor boost demand,” the group’s secretary-general, Angel Gurria, warned in an accompanying statement.
“Governments around the world, including the major emerging economies, must focus on strengthening economic growth and the most effective way is through structural reforms to enhance competition in product and services markets.”
Canada's jobless rate stands at 7 per cent, with about 1.4 million people out of work.
- Bill Curry: Revised jobs figures from Statscan still cause for concern
- The 10 most endangered jobs (and one of them is mine)
- Read the OECD study
Poloz holds the line
Bank of Canada Governor Stephen Poloz appears to be getting his hoped-for export rebound, boosted by the U.S. market and the lower Canadian dollar.
But, the central bank warned today, “this pickup will need to be sustained before it will translate into higher business investment and hiring.”
As expected, Mr. Poloz and his Bank of Canada colleagues, made no change to their “neutral bias,” meaning they’re giving no signal as to whether interest rates will rise or fall, or when. Economists, however, believe the benchmark overnight rate, now at 1 per cent, will rise next year.
Still, the central bank said today that exports “surged” in the second quarter of the year and that “an increasing number of export sectors appear to be turning the corner toward recovery.”
They also said the housing market “has been stronger than anticipated,” The Globe and Mail’s Barrie McKenna reports.
Europe’s recovery, they added, “appears to be faltering” in light of the turmoil in Ukraine, while the U.S. recovery “seems to be back on track.”
“Global financial conditions remain very stimulative and longer-term bond yields have eased even further,” it said.
Today’s statement was perfectly in line with what observers had expected.
“Over all, the key message is that the next move in rates could still be up or down, largely because it is seen as distant enough to be uncertain in either timing or direction,” said chief economist Avery Shenfeld of CIBC World Markets.
“Dovish, but no more than everybody already knew.”
- Barrie McKenna: Bank of Canada sees hope for export rebound
- David Parkinson in ROB Insight (for subscribers): Bank of Canada needs to get with the times
- U.S. economic activity continues to expand
- Kevin Carmichael: Bank of Canada won't follow Fed's lead on interest rates, Poloz says
- Kevin Carmichael in ROB Insight (for subscribers); Poloz sets record straight on inflation target
Auto industry gains
Auto sales in Canada remained in overdrive in August, rising 8 per cent to the highest level on record for the month, The Globe and Mail's Greg Keenan writes.
Canadians drove off dealers’ lots in 171,560 new cars, trucks, minivans and utility vehicles, 21 per cent higher than the five-year average sales figure for the month of August, the Global Automakers of Canada said today.
In the U.S., August auto sales were unexpectedly strong, led by Ford Motor Co., Chrysler Group and Nissan Motor Co., which easily beat analysts’ estimates as the industry is seen reaching volumes not seen since before the recession.
Couche-Tard sells unit
Canadian convenience-store giant Alimentation Couche-Tard Inc. is selling the aviation fuel business it inherited in its acquisition of Norwegian oil giant Statoil ASA’s retail operations.
Laval, Que.-based Couche-Tard said today it struck a deal to sell its aviation fuel unit for an undisclosed sum to Air BP, one of the world’s largest aviation fuel providers, The Globe and Mail's Bertrand Marotte reports.
The agreement is through Couche-Tard’s wholly owned subsidiary Statoil Fuel & Retail AS, which it acquired in a blockbuster $3.6-billion (U.S.) deal in 2012.
Air BP will acquire 100 per cent of all issued and outstanding shares of Statoil Fuel & Retail Aviation AS.
SFR Aviation supplies aviation fuel products to airlines, general aviation, military and bulk customers in nine countries across Northern Europe.
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