Table of Contents

Economic Review & Forecast
Management Minute
Feature Article
Legal Corner
Logistics / Supply Chain News

Scotia Bank Group, Global Economic Research

Retrenchment

A synchronized economic downturn is unfolding globally. Its roots are in the multi-year U.S.-led housing downturn and subsequent subprime mortgage crisis, in addition to this year’s record upward spike in energy and food costs that has undercut purchasing power around the world. And the already weakened outlook has been subsequently compounded by an intensifying ‘financial sector crunch’ — sharply lower values of securitized mortgages, mounting capital losses and bankruptcies — that is reining in credit, the fuel for international growth.

Since mid-year, the sharp plunge in both stock markets and commodity prices highlights the rapid deterioration in both the American economy and global economic prospects. And while policymakers, primarily in the United States, but increasingly throughout the G7, are actively intervening to stabilize the financial system, the short-circuiting of the credit-creation process virtually guarantees that the U.S.-led, but increasingly global downturn will be deeper and more protracted.

With this year’s problems more back-end loaded, international economic activity should still expand by more than 3½% this year, a comparatively good performance. However, the accelerating loss of momentum should see global output growth drop to around 2½% in 2009 — an 8-year low. Prospects will remain on the low side until there are signs that the financial system has stabilized and is again able to support renewed credit expansion and economic growth.

The United States remains at the epicentre of the economic and financial problems dragging down global output growth. U.S. domestic spending, which had been steadily weakening even with the Q2 fiscal boost, is now contracting, as the tightening in credit availability further exacerbates the retrenchment already evident in housing activity and consumer spending. The deleveraging of the financial and household sectors will further dampen confidence, and usher in a prolonged period of decreased spending and increased savings.

Businesses are aggressively paring costs, investments and employment in response to the sharp downward plunge in sales, credit availability and earnings. Furthermore, the recent support from improving net exports that had enabled the U.S. economy to post even modest gains is about to end as the slowing in overseas growth triggers a sharper slowdown in American exports.

It will take time before the series of ‘rescue’ packages become fully operational and help stabilize the credit sensitive sectors of the economy and markets. In the meantime, high inventories of unsold homes and durable goods, especially motor vehicles, are likely to keep downward pressure on prices and production, thereby reinforcing a multi-quarter period of economic retrenchment extending well into 2009. As a result, U.S. output growth is expected to expand an average 1.3% this year and contract 0.6% next year.

Canada faces an uncertain future in light of the rapidly deteriorating outlook for the U.S. and global economies, the continuing strains in financial markets worldwide, and the increasing erosion in consumer and business confidence. This year’s modest 0.5% average expansion in output is expected to be followed next year by a contraction of 0.2%.

The deteriorating conditions south of the border and abroad are having a pronounced effect on the volume of exports and commodity values. In particular, the continuing slide in U.S. housing and retail sales, especially autos, will likely result in even deeper production cuts in manufacturing, primarily in the large export-sensitive production centres in Ontario and Quebec. Business investments are expected to be dialed back in view of the heightened uncertainty surrounding the outlook, the credit availability problems cropping up around the world, and the sharp drop-off in profitability.

Scotia Capital Economics
From the Global Economic Research Market Trends Newsletter
Printed with Permission
http://www.scotiacapital.com/English/bns_econ/bnsmt.pdf

Conflict
Between You and Others

by Cy Charney, President, Charney & Associates Inc.

If your neighbour does you some harm,
do not pretend you are still friends. . . .  Do not hate him, but reprove him for what he did and through this peace can be re-established.

~ Rashbam, Biblical Scholar

1. Before You Take Action

• Evaluate your ability to resolve the issue.  If this is something you have difficulty with, as most people do, seek the advice of someone you trust.  Perhaps he will do a role-play with you to home your skill at handling the situation.
• Deal quickly with personality conflict so that the problem doesn’t mushroom or become a situation you condone.
• Ask the person with whom you have a “beef” for permission to deal with the issue.  Simply approach him and say, “Could the two of us sit down and discuss our differences?  I’d really like to do that.”  An acceptance will set the climate for a collaborative, adult-to-adult problem-solving session.
• Find a neutral venue where your colleagues cannot observe you.
• Collect your thoughts so you are well prepared.  Make some notes so you don’t forget what you intend to say.

2. At The Meeting

• Thank the other person for working with you to solve your differences.
• Establish the climate for a good interchange.  Be constructive and positive in your words, voice tone, and body language.  Point out that the conflict is not good for either of you, and that you are determined to resolve it.
• Make the point that there are two sides to every story, and that you are probably the source of the problem too.
• Invite the other person to state the issues first.  If he/she does, do not interrupt.  Take notes if necessary. Listen to what he/she is saying and how he/she is saying it.
• Summarize the other person’s points to show that you understand.  Show empathy.  A statement such as “I would feel like that too” will go a long way to reducing the anger, so you can both get on with solving the problem.
• If the other person declines to state the problem, state your case.  Be firm and clear.  Maintain eye contact.
• Be specific about the things that bother you.  Don’t assume the other person knows what you are thinking or feeling.
• Give examples of the things that upset you.  Don’t exaggerate or stretch the truth.  Avoid using the words “never” and “always.”
• Don’t use inflammatory language.  If you do, the person will respond to your anger rather than to the content of your message.
• Avoid labels that tend to simplify the issue.  Phrases such as “men or women do that” will increase the emotion and tension, and will prevent a rational discussion of the issues.
• Be assertive.  Use “I” statement instead of “you” statements. Phrases such as “I feel angry” are more likely to encourage the other person to want to offer a solution than “you” segments.  Comments such as “You did this or that” will tend to make the other person defensive.
• Don’t go back in history.  Stick to current events.
• Once you both agree on the problem, move on to solutions.  Offer ideas about what you will do to address his concerns.  Then you can ask what he will do to address your issues.  Involving your colleague in problem-solving will increase his commitment to resolving the problem.
• Agree to disagree where no resolution can be found.  Indicate your respect for the other person’s position even if you do not agree with it.  But don’t give up without trying creative ways of solving each others problems.  Keep looking for creative solutions by using “what if?” statements.  Call a time-out if necessary.  Some issues are difficult to resolve in one session.  Consider taking a break and revisiting the issues with new perspectives.
• Conclude the meeting with a summary of your discussions.

3. Afterwards

• Be mindful of issues raised at your meeting.  Live up to commitments, and express appreciation if others live up to theirs.
• If the issue is not resolved, consider inviting a thirst party to intervene on your behalf.

Cy Charney, President of Charney & Associates. (905-886-5606, www.askcharney.com), is a leading Canadian management consultant focusing on organizational performance improvement.

Technical & Logistics

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Lessons from Previous Recessions

by Bruce McAlpine

Last week I attended an Executive Search Summit at the Princeton Club in New York City, along with one hundred delegates from Europe, Asia, Australia and all over North America.  While the overall conference theme was “Reshaping Search Firm Profitability”, one of the sub-themes was dealing with the current economic downturn.  Three key thoughts emerged:

1. Downturns are inevitable, and actually fairly healthy for the economy.  A quick review of newspapers from the early 90’s and 2001-02 reveals that stories of “the end of the world as we know it” are actually fairly similar, and quite exaggerated.  Sure, the economy is slower, and sure there are lay-offs that affect individuals in very personal and distressing ways, but the downturns are relatively short lived, and the companies that survive actually emerge stronger and are better poised for growth in the years of prosperity that follow.

2. The fundamental human resource challenge that the developed world is facing (the aging of the labour force) has not changed.  In North America, over 80 million Baby Boomers will begin to reach retirement age, beginning next year.  Gen X is just over half the size of the Baby Boomer generation.  Stats Canada projects that within 5 years, more workers will be retiring from the Canadian labour force than new employees will be entering it.  And, 60% of all new jobs will require skills that are possessed by only 20% of the population.  Clearly, the War for Talent is only just beginning.

3. On the Human Capital front, this is the time to take advantage of opportunities that present themselves in the market.  Companies will be using the slowdown as an excuse to trim fat, so lots of talent will be coming onto the market, and readily accessible on the Internet.  However, the best talent will still be employed.  Careful hiring will become more important than ever, along with thoughtfully developed retention strategies that cater to the differing career aspirations and motivational characteristics of the Gen X’s and Y’s.  Make sure you are as careful picking your company’s Executive Recruiter as you are picking your personal Financial Advisor.  As Red Adair (the famous oil well firefighter) said, “The only thing more expensive than hiring a professional is hiring an amateur.”

Bruce is President of Fulcrum Search Science Inc.

LEGAL / HR UPDATE:  Safe At Work Ontario sector plans 2008/09

by Yosie Saint-Cyr, LL.B. Managing Editor at HR Infodesk.com---Canada Payroll and Employment News

The Safe At Work Ontario strategy includes the development and implementation of sector-specific enforcement strategies. To inform interested stakeholders and organizations, the manner in which the Ministry of Labour (MOL) will enhance health and safety compliance in each of the sectors, the Ontario Ministry of Labour has prepared sector plans.

The purpose of the Ministry of Labour's new compliance strategy is designed to improve the health and safety culture of workplaces and reduce workplace injuries and illness. As part of Ontario's ongoing efforts to help reduce workplace injuries, inspectors are “blitzing” industrial, health care, construction and mining workplaces and/or sites over the next month and throughout the year, to help eliminate specific hazards.

As described by the government, each sector plan contains a brief description of some of the main topics that an inspector may address in the workplace.
While each workplace is unique and the circumstances presented to an inspector may result in a different inspection focus, the sector plans are a general overview to the MOL's focus within the sector.

• The Industrial Sector plan can be accessed here
• The Health Care Sector plan can be accessed here
• The Mining Sector plan can be accessed here
• The Construction Sector plan can be accessed here

By Yosie Saint-Cyr, LL.B., Managing Editor at HRinfodesk.com

Published on HRinfodesk---Canadian Payroll and Employment Law News and Developments

HRinfodesk is an information and news service that is published by First Reference, which includes employment law news for every jurisdiction in Canada, a Library of Articles, FAQs, a Calendar of Events, Important Dates and an HR Internet Directory for expanded research. Our search tools will help you to quickly find results by jurisdiction, topic, date, keyword and article number. For the latest employment law news and a ten day trial, click here.

First Reference is a publisher of Canadian employment law, finance and accounting reference manuals that are comprehensive, updated and practical. Publications include The Human Resources Advisor, Human Resources PolicyPro, Finance & Accounting PolicyPro and the HRinfodesk online information and news service (Bulletin and website). For more information or to purchase one of our publications, go to www.firstreference.com.

This article offers general comments on legal developments of concern to businesses. Every effort has been made to ensure the accuracy and timeliness of this information. These publications are written for informational purposes only and should NOT be relied upon as legal advice or opinions. The reader should always obtain legal advice from a qualified lawyer or other qualified professional, which will be responsive to the case or circumstance of the individual. Please note that the content provided in this article or any content contained in or made available through any third party website linked to from this article and/or HRinfodesk, is provided 'as is' without representations or warranties of any kind. All representations and warranties in respect of Content or Third Party Content, express or implied, including, without limitation any representations to warranties or conditions regarding accuracy, timeliness, completeness, non-infringement, merchantability or fitness for any particular purpose are hereby disclaimed.

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Logistics / Supply Chain News

State of Logistics The Canadian Report 2008

Productivity encompasses far more than the old-fashioned concept of a plant’s unit-per-labour costs. As competition becomes more global, innovation is moving from a firm-to-firm level to a supply chain-versus supply chain perspective. Incremental competitiveness advantage is now achieved when all the supply chain players are synchronized and working together.

Canadian manufacturers, retailers, wholesalers and logistics service providers need quality information on logistics and Supply Chain Management (SCM) trends, as well as performance indicators, to provide best practices and benchmarks, justify investment and innovation, monitor industry performance and become more competitive in a global value chain context.

Since 1982, the Council of Supply Chain Management Professionals produced a state of logistics report in the U.S. There has never been a complete overview for Canadian firms to benchmark themselves and learn about supply chain partners, competitors and sector trends.

In that context, Supply Chain & Logistics Association Canada (SCL) has partnered with Industry Canada and Canadian Manufacturers and Exporters (CME) to launch the first Canadian State of Logistics Report.

Read more...