Economy

What Executives Have to Say on the Economy, by the Numers – BNN Bloomberg

Published

2 years ago

September 2, 2022

(Bloomberg) — The economic slowdown was the fastest growing topic discussed by S&P 500 executives for the second consecutive month, according to an analysis of earnings conference conference calls held in August. As leadership debated the severity of the downturn, inflation took center stage, and was the most popular topic this month behind only revenue, guidance and margins, as higher prices continue to have an effect on operations and speculation over what the Federal Reserve will do next moves shares. Company backlogs, general headwinds and solar were also discussed.

Read what S&P 500 executives had to say below:

Economic Slowdown (63 mentions, +933% year-over-year)
- Loews Corp, Chief Executive Officer James S. Tisch: “I don’t foresee a deep and debilitating recession. Rather I can imagine that the slowdown will be relatively shallow, which is consistent with a full employment recession… So, overall I foresee a recession that I would characterize as benign. I have enough self-awareness to realize that I’m an optimist, but I consider myself a realistic optimist.” (8/1)
- Vornado Realty Trust, Chief Executive Officer Steven Roth: “There are signs of a slowdown all around: a rapidly slowing housing market, falling consumer confidence and companies announcing hiring pauses or even layoffs. The inverted yield curve signals market participants expect a recession and the forward yield curve predicts rates will come back down within a couple of years. While we are protected by long-term leases with about 1,500 tenants, we do expect and are prepared for choppy conditions.” (8/2)
- Marathon Oil Corp, Chief Executive Officer Lee Tillman, “The potential for a recession looms and American families are suffering. But the US energy renaissance, led by the shale revolution, has provided a measure of protection from the forced and more austere measures now being considered in Europe.” [However,] “we could be in for an extended period of elevated commodity prices globally, both for oil and natural gas.” (8/4)
Inflation (1,012 mentions, +140%)
- Starbucks Corp, Interim Chief Executive Officer Howard D. Schultz: “While we are sensitive to the impact inflation and economic uncertainty are certainly having on consumers, its critically important that you all understand that we are not currently seeing any measurable reduction in customer spending or evidence of customers trading down.” (8/2)
- Home Depot Inc., Chief Financial Officer Richard McPhail: “We find ourselves in a unique environment with many crosscurrents. We’re operating in a broad-based inflationary environment not seen in four decades while managing through constrained global supply chain conditions, all against the backdrop of monetary policy shifts intended to moderate demand. We also see engaged and resilient homeowners who have strong balance sheets, consumers spending more time in their homes and continued structural support for improvement project demand.” (8/16)
- PVH Corp, Chief Financial Officer Zac Coughlin: “Revenue is lower than planned primarily due to an increasingly challenging macro environment which particularly effected our North America wholesale business as inflationary pressures weigh on consumer demand and our wholesale partners take a more cautious approach.” (8/31)
Backlog (452 mentions, +94%)
- Caterpillar Inc., Chief Financial Officer Andrew Bonfield: “Overall, we are not seeing signs of slowing demand as order levels and backlog remain healthy. Our retail statistics, or sales to users, are normally strongly correlated to demand in a typical environment. However, the ongoing supply chain constraints continue to impact our ability to ship equipment.” (8/2)
- Applied Materials Inc., Chief Executive Officer Gary E. Dickerson: “Resolving supply chain issues has required new levels of collaboration between our global teams suppliers and customers. While all of this hard work is yielding results, global supply chains remain stretched. Demand for Applied’s products is still higher than our ability to fulfill it and our backlog continues to grow.” (8/18)
- Hewlett Packard Enterprise, Chief Executive Officer Antonio Neri: “New orders exceeded our expectations, despite finally starting to decelerate the growth rates, bringing our quarterly exit backlog to another record level. That is significant considering that for the previous four consecutive quarters we had grown orders 20% or more year-over-year. We continue to see robust consumer demand in the market and a high quality durable sales pipeline.” (8/30)
Headwinds (929 mentions, +85%)
- Starbucks Corp, Chief Financial Officer Rachel Ruggeri: “Looking ahead however, the international segment may face near-term challenges. Given the prolonged lockdowns in China with limited mobility recovery in Q3, the headwinds now extended to Q4 as the market continues to recover. The current pace of recovery implies that China’s operating income contribution as a percent of global operating income may be reduced further than what we had previously anticipated to roughly a quarter of the contribution realized in a typical fiscal year. Outside of China, the increasing COVID cases around the world may damper the rapid growth we are seeing in many markets.” (8/2)
- Principal Financial Group, Chief Executive Officer and President, Principal Global Patrick G. Halter: “I think the second half of 2022 obviously has macro headwinds. And as we talked to the managers, particularly on the private equity side, about their current market outlook, and the lagging nature of the return cycle, we could see some pullback clearly in alts performance and probably be below trend to what we’ve seen in the past.” (8/9)
- Cisco Systems Inc., Chief Executive Officer Chuck Robbins: “While the component supply headwinds remain they have begun to show early signs of easing. The decisions we made and the multiple actions we have taken over the past two years are helping to improve our resiliency and will help offset cost inflation. These include adding new suppliers, leveraging alternative suppliers, redesigning hundreds of products to use alternative components with similar capability and targeted price increases, all of which position us for the future.” (8/17)
Solar (138 mentions, +82%)
- WEC Energy Inc., Chief Executive Officer Scott J. Lauber: “Now you may recall our recent announcement about an adjustment that we made to our schedule of power plant retirements… We base this decision on two critical factors. First, tight energy supply conditions in the Midwest power market and expected delays in the delivery of solar panels and batteries, delays that will clearly affect the in-service states of renewable projects.” (8/2)
- SolarEdge Technologies Inc., Chief Executive Officer Zvi Lando: “The topic of renewable energy and climate change has a lot of governments and leadership around the world busy. And what’s interesting is that there is, in countries that are strongly linked to fossil fuel like in the case of Saudi Arabia, a push from the leadership over there to implement renewable energies and solar in particular.” (8/2)
- Dominion Energy Inc., Chief Executive Officer Bob Blue: “Let me touch on the solar supply chain. As we’ve discussed on prior calls, there continue to be challenges. Supply is still tight and prices for certain components are still up.” (8/8)

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

Published

2 days ago

November 8, 2024

Anne Joseph

OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

Published

3 days ago

November 6, 2024

Anne Joseph

The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Economy

Trump’s victory sparks concerns over ripple effect on Canadian economy

Published

4 days ago

November 6, 2024

Anne Joseph

As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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