Eagle Vision Quarterly Newsletter

December 2011

Richard L. Simms
President, Black Eagle Executive Search


December 2011 employment figures from Statistics Canada were not overly encouraging and in its January 6th, 2012 update for the year ending December 31, 2011, their analysis follows:


“Following two months of declines, employment rose slightly in December, up 18,000. The unemployment rate edged up to 7.5% as more people participated in the labour market. Over the past 12 months, employment growth totaled 1.2% (+199,000), with nearly all of the gains in the first half of the year."


The United States employment figures were more encouraging as reported on January 6, 2012:


“Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5%, continued to trend down, the U.S. Bureau of Labor Statistics reported today... Both the number of unemployed persons (13.1 million) and the unemployment rate (8.5 percent) continued to trend down in December. The unemployment rate has declined by 0.6 percentage point since August.”


So the bad news is that the Canadian employment situation is somewhat stagnant, but the good news is that the U.S. employment situation is improving. However, Canada’s unemployment rate is 7.5% and the U.S. rate is still higher at 8.5%.


Canada’s housing market showed continued strength in December 2011 as reported by CMHC:


“OTTAWA, January 10, 2012 — The seasonally adjusted annual rate of housing starts was 200,200 units in December, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 185,600 units in November 2011.

The seasonally adjusted annual rate of urban starts increased by 10.1 per cent to 181,900 units in December. Urban single starts increased by 3.8 per cent in December to 70,600 units, while multiple urban starts were up by 14.5 per cent to 111,300 units.

December’s seasonally adjusted annual rate of urban starts increased by 52.9 per cent in Atlantic Canada, 35.3 per cent in Ontario and by 9 per cent in Québec. Urban starts decreased by 19.8 per cent in British Columbia and by 11 per cent in the Prairies."

The U.S. housing market remains weak but is showing signs of recovery as noted by the National Association of Home Builders:

December 23, 2011 – Sales of newly built, single-family homes edged up 1.6 percent to a seasonally adjusted annual rate of 315,000 units in November, according to newly released figures by the U.S. Commerce Department.  This marks the third consecutive monthly gain in new-home sales and the fastest pace of such activity since April.“With today’s report, we have now seen three straight months of modest gains in sales, starts and builder confidence in the market for new single-family homes,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) ... “While the numbers are still quite low on a historic basis, this upward trend indicates that the market is slowly finding its footing and bodes well for the months ahead.”


So overall, for the Canadian economy is not growing rapidly, but could get a boost from an improving economy in the U.S., our biggest trading partner.


However, continuing government debt problems in both the U.S. and Europe could cause a drag on the U.S and Canadian recovery and Europe is now officially in recession mode stalling their economic recovery.


As in recent quarterly newsletters, the overall sentiment from an employment point of view is one of caution. Once a more positive sentiment returns, both U.S. and Canadian companies who have been accumulating significant profits and cash stockpiles will be more oriented to spend these funds on new capital investments in plant and equipment as well as increased employment.


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