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morning business briefing

These are stories Report on Business is following Monday, May 13, 2013.

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What to expect from CREA
House price appreciation in Canada is believed to have dipped to its slowest rate since 2009.

The Canadian Real Estate Association is expected to report Wednesday that the Multiple Listing Service home price index gained just 1.7 per cent in April from a year earlier, according to BMO Nesbitt Burns.

That would be down from 2.2 per cent in March, and would mark the slimmest gain since September of 2009, said senior economist Benjamin Reitzes.

Based on numbers already reported by several local real estate boards, Mr. Reitzes projects CREA will report that home sales slipped by a "modest" 4 per cent in April from a year earlier.

That would be the smallest decline in six months, but he notes a "wonky calendar" because Easter came early, thus pushing down March levels and driving up those of last month.

"Perhaps a better gauge of the softening market is the anticipated year-to-date drop of 10 per cent (assuming our April call is correct," he said in a research note.

Vancouver is still one of Canada's weaker cities, he added, with sales in April down 6.1 per cent from a year earlier, though that's better than the "16 straight months of double-digit declines." Vancouver home sales so far this year are about 17 per cent below the levels of the same period last year.

Toronto sales fell just 2.1 per cent per cent last month from a year earlier, and are down by about 11 per cent in the first four months of 2013.

Calgary, however, was a "bright spot," with sales up 8 per cent.

Canadian policy makers have tried to engineer a soft landing in the housing market, and many economists believe it has done so.

Retailers sign on to Bangladesh pact
Major retailers are signing on to a manufacturing safety agreement in the wake of the Bangladesh tragedy.

Sweden's H&M and Spain's Inditex announced the move today.

The agreement spells out how retailers can help improve safety standards in factories in Bangladesh, where the collapse of a building last month killed 1,100 workers.

H&M today announced its support for the Accord on Fire and Building Safety, spurred by the IndustiALL Global Union.

"Fire and building safety are extremely important issues for us and we put a lot of effort and resources within this area," Helena Helmersson, H&M's chief of sustainability, said in a statement.

"H&M has for many years taken the lead to improve and secure the safety of the workers in the garment industry. With this commitment we can now influence even more in this issue. We hope for a broad coalition of signatures in order for the agreement to work effectively on ground."

Labour costs and jobless levels
A new report by the U.S. government paints an interesting picture of the relationship between factory labour costs and jobless levels, when viewed alongside unemployment rates.

As in, if you think high wages and benefits drive up unemployment, think again.

And if you think low wages and benefits hold unemployment down, think again.

There are several things to keep in mind in the data from the U.S. Labor Department and the World Bank.

Many factors weigh on corporate employment and investment decisions, including infrastructure, energy costs, taxes and the like.

The latest numbers from the department's Bureau of Labor Statistics, alongside the World Bank's jobless data, don't take into account these and other issues when looking at hour labour costs in manufacturing, which are often benchmarks.

But they tell us something important, nonetheless, particularly amid such a fierce debate over so-called right-to-work legislation in the United States, and similar discussions in some parts of Canada.

Such laws, which generally weaken organized labour by allowing workers to opt out of paying union dues, are seen as attractive in terms of drawing jobs to a region.

But consider what the BLS report shows for 2011 in terms of average hourly compensation costs in manufacturing, in U.S. dollars, including wages, benefits and the cost to employers of social insurance. Then add in 2011 jobless rates as published by the World Bank. While not all are manufacturing powerhouses, some are, and the numbers tell an interesting tale.

Here's what you get:

The top 16

  • Norway, total average hourly labour cost of $64.15 in 2011 (Unemployment at 3.3 per cent in 2011)
  • Switzerland $60.40 (4.1 per cent)
  • Belgium $54.77 (7.1 per cent)
  • Denmark $51.67 (7.6 per cent)
  • Sweden $49.12 (7.5 per cent)
  • Germany $47.38 (5.9 per cent)
  • Australia $46.29 (5.1 per cent)
  • Finland $44.14 (7.7 per cent)
  • Austria $43.16 (4.1 per cent)
  • Netherlands $42.26 (4.4 per cent)
  • France $42.12 (9.3 per cent)
  • Ireland $39.83 (14.4 per cent)
  • Canada $36.56 (7.4 per cent)
  • Italy $36.17 (8.4 per cent)
  • Japan $35.71 (4.5 per cent)
  • U.S. $35.53 (8.9 per cent)

The bottom 10

  • Philippines $2.01 (7 per cent)
  • Mexico $6.48 (5.3 per cent)
  • Poland $8.83 (9.6 per cent)
  • Hungary $9.17 (10.9 per cent)
  • Taiwan $9.34 (5.2 per cent, from other sources)
  • Estonia $10.39 (12.5 per cent)
  • Brazil $11.65 (6 per cent, from other sources)
  • Slovakia $11.77 (13.5 per cent)
  • Portugal $12.91 (12.7 per cent)
  • Czech Republic $13.13 (6.7 per cent)

One must remember, of course that this covers the immediate post-crisis era, with unnaturally high unemployment that remains a blight, and, in the case of Europe, a raging debt crisis.

As well, the financial crisis and Great Recession affected countries differently in terms of jobs lost. Canada, for example, experienced a milder recession than did the United States or the crippled parts of Europe, but also must juggle the ups and downs of its currency.

The numbers also don't take into account regional differences within countries. But an examination of jobless levels in the United States for 2011 shows no discernible pattern. Some right-to-work states boasted unemployment below the national average, and some suffered far higher levels.

In Canada, unemployment was running at 7.8 per cent in Ontario and Quebec in 2011, well above that of the resource-rich Prairie provinces and well below that of Atlantic Canada, though not much higher than the jobless level of British Columbia.

What this all shows is that there is no pattern, which is food for thought when the issue next arises.

(For the BLS report, see the accompanying infographic or click here.)

Potty humour? Not so funny
There's something "utterly hideous" that begins in the WCs of Britain.

So much so that two major utilities are stepping up a campaign to end "sewer abuse," or flushing things like food fat and wet wipes down the toilet.

"There are only three things that can be safely flushed down the loo without danger of blockage – pee, poo and paper," Tony Griffiths, a wastewater network manager with United Utilities, says in a statement to promote the campaign, which is part of a broader environmental initiative.

"Flushing other items risks a big plumbing bill, as well as environmental damage. With such a multitude of cleaning and cleansing wipes now being actively marketed as 'flushable,' we felt we needed to do more to raise awareness of this problem with our 'Can't Flush This' campaign."

Adds Rob Smith of Thames Water, the utility's chief sewer flusher: "Sadly we are seeing more fat and wet wipes – which should never be flushed even if the packaging says 'flushable' – ending up in our sewers. That's a big headache for us, but it can also lead to sewage backing up into our customers' homes and gardens, which is utterly hideous."

You're not supposed to wash them down the sink either.

I must say, I've not seen a publicly traded company use pee and poo in a news release, but, that aside, this is a serious problem where the environment's concerned.

Sewer blockages can kill fish and other animals, the utilities say.

Thames Water, which deals with some 14 million people in London and the Thames Valley, says it spends about £12-million ($18.5-billion) a year clearing away some 7,000 blockages from more than 100,000 kilometres of sewer.

Half of those blockages, it says, are the result of food fat and wet wipes. Worse, if you happen to live there, about 1,000 homes and 7,000 gardens flood with sewage in a given year, half because of such abuse.

United Utilities, in the northwest, serves half the number of people that Thames Water does, but spends far more, some £20-million a year, dealing with 53,000 blockages, many for the same reason.

Not living in Britain, I'm not sure exactly what it is they're doing in the northwest – though the campaign says Liverpool is the "make-up wipe flushing capital of the region -  or why you'd flush food fat down the toilet to begin with.

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