These are some of the major stories Report on Business followed this week. Get the top business stories on weekdays on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Tech world abuzz over iPad 3 Remember last year when everyone went nuts over the possibility of an iPhone 5, and they got the iPhone 4S instead?
Everyone's now hyped over what's widely expected to be the unveiling by Apple Inc. of the third generation of its iPad next Wednesday in San Francisco.
That's based on a particularly teasing press invitation that went out this week, with a partial picture of its widly popular tablet and the promise that it's something "you really need to see. And touch."
Speculation is that the new device will sport a quad-core processor, a sharper screen, and support for 4G wireless networks.
I'm not saying it won't be an iPad 3 this time out. And even if it turned out to be an iPad 2S or something like that, I'm sure it won't disappoint. The iPhone 4S certaintly didn't in the end, winning rave reviews and huge sales. I'm just sayin' that the folks at Apple are teases - and they do it extremely well - and the market takes from them what it will.
Apple sold 37.04 million iPhones and 15.43 million iPads in its first quarter. And as The Globe and Mail's Iain Marlow reported this week, Apple's market value crossed the $500-billion (U.S.) mark.
Why we need to get a life Executive search and career coach Dorothy Dalton offers some compelling points on "presenteeism," which doesn't draw as much attention as "absenteeism," but can be just as destructive in the workplace.
Ms. Dalton, a co-founder of 3Plus International, warns that presenteeism, or working when you're sick to avoid being seen as away from the office, among other things, can hurt productivity to the tune of billions.
"This extends the insidious and more extensive reach of presenteeism beyond macho, masters of the universe, boiler room cultures, into business practices, which many of us encounter every day, as organizations become 'lean, mean and keen,'" she writes on her website.
Many of us know this as not having a life, but Ms. Dalton sums it up well: Skipping vacation, staying late at the office without work to do, working late and on weekends, and going without lunch.
"The fallout from this culture reaches and impacts entire workforces and in particular those who can’t subscribe to this charade and for any number of reasons have to work their contracted hours," she says. "Working mothers are one category to feel the judgment heat ... The irony is that 'presenteeism' does eventually lead to 'absenteeism,' with stress from heavy workloads and job insecurity fears being the highest causes of sickness absence."
Ms. Dalton isn't alone. A report this month from Prof. Cary Cooper of Lancaster University and Britain's Ellipse insurance group discusses the STOICs (Sick Though Often Inbox Checking), the Wickies (Working Sickies), the WIMPs (Works Ill, Moans Persistently) and the Remote Republic (Flexi-Home Working-People Working From Outside the Workplace).
"Perhaps due to the prevailing macroeconomic climate and decreasing job security, the vast majority of people (80 per cent) are still going to work when they're ill," Prof. Cooper writes. "The pressure to work when ill and failure to address the condition early on are dangerous and often prove to be a false economy, contributing in some cases to chronic medical conditions."
A recent study by Prof. Gary Johns of Concordia University's John Molson School of Business surveyed 444 people, who reported an average of three "presenteeism" days over the previous six months and 1.8 "absenteeism" days.
Europe on the ropes Europe continues to sink even deeper into the muck amid ongoing uncertainties and crippling unemployment in some regions.
The Eurostat agency reported this week that the jobless rate in the 17-member euro zone climbed in January to 10.7 per cent, while the rate in the wider European Union rose to 10.1 per cent.
While some countries, such as Austria, the Netherlands, Luxembourg and Germany, enjoy lower unemployment, the embattled nations of Spain, Greece, Ireland and Portugal are suffering with jobless levels between about 15 per cent and 23 per cent.
The region's youth have been particularly hard hit, with a jobless rate of 22 per cent. In Spain and Greece, almost half of their young people can't find work.
The reports came as Greece moved closer to winning a second bailout package, and Ireland added to the uncertainty by deciding to call a referendum on agreeing to the new EU fiscal pact. Twenty-five of the 27 EU countries signed the pact on Friday, while Britain and the Czech Republic had already said no.
This, of course, leaves the weak nations in a juggling act, trying to balance austerity against the need for economic growth and measures to get people back to work.
"The need for actions with respect to Europe’s economy could not have been underscored more starkly than by yesterday’s unemployment figures which showed that the current focus on fiscal austerity was sending unemployment rates sharply higher, particularly in southern Europe," said CMC Markets analyst Michael Hewson.
- Euro zone unemployment hits new high
- European states sign new fiscal treaty
- Spain's jobless rate hits 22.9%
- Payments rules out on Greek credit default swaps
- ECB fattens up Europe's banks with cheap loans
- Irish vote on EU treaty poses 'crucial risk'
Whither Canada's economy Canada's economy began running in markedly lower gear in the final quarter of last year, but the latest signs suggest a performance this year that's better than what was anticipated just a few months ago.
Gross domestic product expanded in the final three months of 2011 at an annualized pace of 1.8 per cent, according to Statistics Canada Friday, a slower pace than the 4.2 per cent in the third quarter. On a monthly basis, the economy flatlined in October and November, then grew by 0.4 per cent in December.
Quarterly growth was driven by consumer spending and exports, though growth in exports slowed, while housing investment lost a lot of steam.
What does it all tell us about this year? Here are some views:
"Overall, we were more encouraged to see that consumption grew more closely with income and that business investment rebounded in the fourth quarter. The latter will be crucially important to Canada's future economic performance. Unfortunately, we are not that confident about prospects for housing. In addition, should governments cut spending too hard, this is likely to further dampen economic growth in 2012." David Madani, Capital Economics
"We expect economic growth to average above 2 per cent in 2012, compared to the 1.7-per-cent growth rate we were expecting at the time of our December forecast. While the economic backdrop is improving, a modest pace of growth is likely to keep the Bank of Canada from raising rates until mid-2013, although there is a risk that continued strength in consumer spending may give the central bank reasons to move earlier." Diana Petramala, Toronto-Dominion Bank
"While the Q4 pace of growth came in a few notches below the Bank of Canada’s expectations, the BoC likely isn’t fretting, given the strong detail in the report, and revisions to prior quarters that put 2011 growth at 2.5 per cent (better than the bank’s own call for 2.4 per cent). Given December’s strong 0.4-per-cent GDP gain, and given continued indicators that the economy of our largest trading partner continues to heal, Canadian economic growth in Q1 2012 is poised to accelerate, quite likely beating the bank’s 1.8-per-cent call for that quarter." Emanuella Enenajor, CIBC World Markets
- Canada's economy loses steam in fourth quarter
- Jeremy Torobin's Economy Lab: Canadian economy slows, but consumers going strong
Over a barrel Oil is the liquid that unites us and divides us.
We're united in our anger over high prices, and, in Canada, now showing divisions among the haves and the have-nots.
The elevated price of crude , pumped by tensions over Iran and, late this week, reports of a pipeline explosion in Saudi Arabia that the Saudis deny, is a concern the world over. Surging oil prices could derail the recovery, though we're not at that point yet.
"In Europe the fuel issue is huge and people are really angry," said Nicola Duke, an independent crude futures trader in London, adding she expects prices won't go higher over the next couple of weeks unless tensions mount in the Middle East.
"Brent priced in euros is at all-time highs. I see people driving less and less and the cost of everything is rising as these costs are priced in."
In Canada, the issue has sparked tensions between Alberta and Ontario, and that's unlikely to ease.
High oil prices, of course, are a boon to Alberta, though they help pump up the Canadian dollar , whose strength has hit the manufacturing sectors of Ontario and Quebec. Indeed, some 500,000 factory jobs have died over the 10 years since the currency began climbing back from its 62-cent lows, BMO Nesbitt Burns calculates.
All of which led to the spat between Alberta Premier Alison Redford, who urged Ontario to aid in the fight for pipeline capacity, and Ontario's Dalton McGuinty, who said he'd take a weaker loonie over a "rapidly growing" energy sector in the western province.
"With future oil sands production, global oil demand and oil exports seen keeping [the Canadian dollar]persistently strong, regional tensions are likely to linger, particularly if the benefits remain highly concentrated," said senior currency strategists David Watt and Stewart Hall of RBC Dominion Securities.
- Markets see new threat in surging crude
- McGuinty-Redford war of words keep simmering
- Stephen Gordon's Economy Lab: Strong dollar is good for Canada
Oh, that loonie And on that note, economists this week used the 10-year anniversary of the beginning of the dollar's turnaround to look at the impact over that period. Here's what Douglas Porter of BMO Nesbitt Burns and Avery Shenfeld and Warren Lovely of CIBC World Markets found:
- Employment in manufacturing plunged 22 per cent, a cost of almost 500,000 jobs, according to Mr. Porter. Having said that, he added in an interview, the U.S. also suffered factory losses so more was at play. Still, it had a big impact.
- The manufacturing job losses have been "largely mirrored" by a strong showing in resources, according to Mr. Porter.
- All else being equal, the CIBC economists say, a stronger dollar helps hold down inflation. "Held back by a lofty loonie, Canadian import prices are still some 10 per cent lower than they were a decade ago."
- Canada's "previously robust" current account surplus, the broadest measure of trade, has plunged to a deficit, given the dollar's lofty levels along with a drop in U.S. spending, Mr. Porter says.
- Merchandise trade has come back, but the surplus "remains a shadow of itself from 10 years ago." And, Mr. Porter notes, "perhaps the most telling statistic in the sea of data ... is the $32-billion swing in auto trade over the 10-year period, from a surplus of around 2 per cent of GDP in 2001 to a deficit of 0.7 per cent last year."
- The combination of the strong dollar and high commodity prices has helped remake the economic map, giving Alberta, Saskatchewan and Newfoundland and Labrador a big leg up over other provinces, Mr. Shenfeld and Mr. Lovely say. "Expect this underperformance to continue, with average annual real GDP growth in Canada’s industrial heartland - Ontario and Quebec - likely to trail that seen in Canada’s most resource-rich regions by at least 1 per cent over the coming five years."
- Investors in Toronto-listed stocks were doing better than those in the S&P 500 even without factoring in the dollar, largely on the surge in commodities. "However, when adjusted to common currency terms, the relative return gap swells tremendously, with holdings in foreign markets shredded by the loonie's surge," Mr. Porter says.
The strong dollar's not going away, either. Scotia Capital currency strategists Camilla Sutton and Eric Theoret forecast the loonie will end this year at $1.02.
- High loonie has taken its toll on auto sector, banks say
- Prentice calls for national industrial strategy
- Forecasting the flight of the loonie
- Iceland eyes loonie, Canada ready to talk
Ten things 1. The CRTC warns that its national Do-Not-Call list is facing "funding challenges" and could run out of money by the end of this month. Hey, maybe everyone will be able to get in on the act next election day.
2. Wondering how you look on an iPhone or iPad? If you don't like the jowls or saggy neck on FaceTime, Dr. Robert Sigal of the Austin-Weston Centre for Cosmetic Surgery may have what you're looking for: "The angle at which the phone is held, with the caller looking downward into the camera, really captures any heaviness, fullness and sagging of the face and neck. People say ‘I never knew I looked like that! I need to do something!’ I’ve started calling it the ‘FaceTime Facelift’ effect. And we’ve developed procedures to specifically address it." (The Washington area centre is also big on boob jobs, but if it's just FaceTime ...)
3. A Southwest Airlines pilot might want to work on his enunciation after spooking some travellers when he broadcast an air traffic controller's birthday wishes to his mother on a flight from Baltimore to Long Island, saying there's a "mom on board." Some passengers thought he said there was a "bomb on board," according to several news outlets, including The Telegraph. Bayday! Bayday!
4. If you can't get by, get high? The village of Rasquera in Spain, which has been crippled by high unemployment, has decided to lease out land to a Barcelona marijuana smokers group to grow its own pot. It's not clear that its legal, The Associated Press reported, but it will create 40 jobs.
5. German Finance Minister Wolfgang Schaeuble was criticized in some quarters this week for playing Sudoku during the parliamentary discussion on Greece's bailout. Of course, if the Greeks had as much of a handle on numbers as does Mr. Schaeuble, they might not be in the spot they're in.
6. No charges have been proven, but here's what the FBI alleged in its online wanted poster for Adriano Sotomayor, who, according to Forbes, was arrested this week: "Adriano Sotomayor is wanted for his alleged involvement in the defrauding of members of the Dominican Sisters of Our Lady of the Rosary of Fatima in Puerto Rico and Pennsylvania, between May of 2009 and June of 2011. Sotomayor launched his scheme by causing an elderly nun to believe that she had been named in a will as a beneficiary of an estate valued at approximately $2.1-million. In order to lure the elderly nun into the scheme, Sotomayor caused the victim to believe that the man who notified her about the will was a Catholic priest from New Jersey, and the deceased was one of his parishioners."
7. Stock brokers in Hong Kong are protesting a cutback in their lunch break, which used to be 90 minutes but, as of Monday, will be a true lunch hour. Actually, the trading break used to be 2 1/2 hours, but it was cut last year.
8. "Invasions of privacy are odious, and sometimes illegal, but to put it bluntly they don't kill you. Terrorists do." An interesting take by Peter Clarke, the one-time Scotland Yard counter-terrorism chief, to the British inquiry into the phone hacking mess, reported this week by The Associated Press.
9. Tweet of the week, from @TonyclementCPC: "You mean #HUNTSVILLE. Thx. RT @CityNews #Hunstville man snags whopping $3.1 MILLION in @casinoramalive slot machine... ow.ly/9oq6o"
10. "It's been a while since the Greek people heard good words. Today they heard a good word." So declared Greek Finance Minister Evangelos Venizelos Thursday about the country moving closer to a second bailout. You think? Given that he was talking about a bailout tied to conditions that have led to widespread protests and strikes, I don't.
Required reading this week Regulation in the massive financial advice industry isn’t working, and already this year Ontario judges have given the green light to three major class-action lawsuits, Barrie McKenna writes.
Faced with a massive skills shortage and a surge of job openings, Western Canadian employers are looking to an old source for new workers: hard-up Ireland. Sean Silcoff reports.
Enbridge Inc. is racing to expand its pipeline capacity in oil-rich North Dakota, amid a fountain of new U.S. crude production that promises to sustain the pipeline industry over the next decade, Nathan VanderKlippe reports.
The wealthy really are different from everyone else. They’re more likely to cheat, lie and break the law, Martin Mittelstaedt writes.
Canada’s two largest banks are seeing profits fall as their capital markets businesses feel the pinch of global economic uncertainty, most notably in Europe, Grant Robertson and Tara Perkins write.
What to watch for next week The Bank of Canada is back at the table with its policy meeting of the year and an announcement Thursday. No change is expected in the central bank's benchmark rate of 1 per cent, and isn't for quite some time yet.
"With investors paring the odds of both a U.S. recession and euro zone train wreck, the odds of an interim bank rate cut have not surprisingly dwindled," said Peter Buchanan of CIBC World Markets.
"That said, the last thing Governor Carney wants is to add to the currency’s tailwinds and manufacturers' competitive woes, with the loonie back at five-month highs on triple-digit crude. Look for a cautious statement consequently that stresses continuing global financial risks along with the ongoing dangers of an overvalued currency."
The European Central Bank and Bank of England also meet next Thursday.
A day later, markets will turn their attention to the key issue of unemployment in both Canada and the United States.
Economists largely expect Statistics Canada's jobs report to show about 15,000 jobs were created in February, and the unemployment rate remained stuck at 7.6 per cent. In the United States, where the labour market has made surprising gains recently, observers expect to see a reading of more than 200,000 jobs, with the jobless rate holding at 8.3 per cent.
"We don’t anticipate a further rise in the jobless rate, but we also don’t look for a break from the recent lacklustre pace of job growth either," deputy chief economist Douglas Porter of BMO Nesbitt Burns said of the Canadian report.
"Mild weather will support some sectors (retail, construction, transportation), but could weigh on others (recreation)."
In the markets, earnings are slowing down, but some biggies remain, notably Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Canadian Natural Resources Ltd., Dorel Industries Inc. and Viterra Inc., among others, which report next week.