March 1998 Edition
TRUCKS
While the proportion of households with a vehicle remained unchanged over the last 10 years the real change occurred in the type of vehicle Canadians were driving. In 1987, 78% of households reported having an automobile and only 23% had a van or truck. By 1997, automobile ownership had dipped slightly to 72%, while van or truck ownership had increased to 33%. The minivan popularity of the early 1990s and the more recent appeal of four-wheel drive vehicles may explain this shift. New motor vehicle sales data show that, on a seasonally adjusted basis, sales of trucks, vans, and buses increased 21% between May 1996 and May 1997.
SHOPPERS
Crowds are the No. 1 complaint of shoppers: 26 per cent cited the problem in a survey by Decima Research for the Retail Council of Canada and American Express. Other pet peeves were high cost of goods (19 per cent), the time involved (17 per cent), bad service and long lineups (7 per cent each) and poor selection (5 per cent). The council suggests retailers do whatever it takes to make shopping less painful. Store employees should be quick, products must be easy to find and checkouts should be free of lineups, it says.
FAMILY FOOD
Average Canadian expenditure on food remained virtually unchanged between 1992 and 1996. The average household spent $112.09 a week on food purchased in grocery stores or restaurants, compared with $110.44 in 1992. One reason that household expenditure on food rose only slightly was due to a 6.5% decline in spending on restaurant meals. Households spent on average 5.0% more on food purchased from stores in 1996 compared with 1992. Provincially, the average weekly food expenditures were lowest in the east and highest in the west. In 1996, the average for households in New Brunswick was $97.31 a week on food while households in B.C. spent on average $121.73 a week, 20.1% higher. Households spent 27.8% of their weekly food budget on restaurant meals in 1996, compared with the 30.2% in 1992.
TRENDS
A major Canadian supermarket chain has launched a new product----banking services for its customers. Modeled on a similar service offered by some grocery stores in Britain, it will provide debit cards, credit cards, savings accounts and access to automated teller machines and telephone banking. The new venture will also feature some in-store kiosks. Banking customers will get loyalty points they can use towards groceries. Chains in Britain have signed up hundreds of thousands of banking customers. Supermarkets have also become more prominent on the U.S. banking scene, where thousands of in-store branches have sprung up and are generally successful.
TRAVEL
After four years of haggling, Japan and the United States reached an agreement on dividing up the $10 billion Transpacific airline market. But European airlines are likely to challenge some of the details of the deal, which still seems to favour American airlines at others' expense.
CONSULTING
According to the Kennedy Research Group which tracks the consulting industry, the worldwide management consulting business is expected to grow by nearly 60 per cent to about $114 billion (U.S.) by the year 2000, driven by technological change and globalization of the marketplace. They expect information technology to account for 70 per cent of consulting work by 2000, an increase from 64 per cent now.
SKILLS
A new Ontario survey says skilled trade jobs are highly valued, but that sentiment isn't prompting youngsters to enter these fields in big numbers. More than half of the 525 interviewees to the Ernst & Young Poll said they would encourage young people to take up a trade. Many industries could soon face severe labour shortfalls in the skilled trades. The study suggests more needs to be done to get the word out about these potential job opportunities.
SENIORS
Having bought a digital organizer and finding it hard to use because the instructions were confusing, the buttons too tiny and its labels so small they could not be read, an Illinois entrepreneur has formed an evaluation company (www.seniorfriendly.com on the Internet) that rates consumer electronics and home appliances according to their ease of use for people 50 and over, of which there are more than 69 million in the U.S. Currently, the website recommends only two VCRs out of 14 units it has tested and 3 out of 15 camcorders. Products are tested against six criteria: Friendliness of packaging, assembly instructions, assembly, operating instructions, operations and routine servicing.
DEALERS
The U.S. has 22,650 automobile dealers and their net profit margins are a modest 1.5 per cent of total sales. The net profit on each of the 15 million new vehicles sold last year in the U.S. was $300 before discounts. New cars, which 20 years ago used to bring in most of the profits, now account for barely 10 per cent of the total. The rest comes from used cars (an estimated 40 million were sold last year), servicing and finance. About 850 dealerships have disappeared in the last five years and it is estimated that there will only be around 11,000 in five years time.
LABOUR
Plantation owners in Thailand are not replacing people with machines, they are giving the work to monkeys. In some Thai villages up to 10 per cent of the land is devoted to growing coconuts which are harvested each month and produce up to 70 coconuts a year. A workforce of several thousand monkeys in southern Thailand help pick the country's crop of 1.5 million tonnes of coconuts. Villages often have at least one monkey per household and the animal is rented out to the local plantation at a modest fee. A well trained monkey can change hands for up to $400. This is a bargain for a plantation owner who spends just $12 a month on "wages" of eggs, rice and fruit. Working monkeys are given names, groomed, bathed and fed three times a day.
LUMBER
According to the Canadian Lumbermen's Association, China is opening up as a big market for Canadian lumber, helping to offset slumping demand in countries hit by the Asian currency crisis. The Chinese government has rescinded 15-year-old restrictions on the use of lumber and wood products in construction. The country had wanted to conserve its wood supplies but now realizes that most of the wood used in China is for cooking and heating, not construction.
NEWSPAPERS
After years of decline, newspaper circulation in Canada appears to have stabilized. The Canadian Newspapers Association, the main lobby group for the country's 105 daily newspapers, reports that 32.96 million copies a week were sold across Canada in 1997, just slightly below the 34.03 million sold in 1996. Until 1997, circulation fell every year in the 1990s.
2000
Most of Canada's stock exchanges are moving to force public companies to disclose the risks that the Year 2000 computer problem poses for them. Companies that refuse to comply could face sanctions raging from a $1-million fine to a cease-trade order. In the U.S., the Securities and Exchange Commission has already put in place disclosure rules which require public companies which have substantial Year 200 problems to disclose their costs and plans this spring. The SEC guidelines cover about 12,000 public corporations, 400 investment companies and thousands of investment-advisor firms.
ADB
Canada is the second largest non-Asian contributor to the Asian Development Bank and the sixth largest out of 56 members. Canada's capital subscription is $2.57 billion (U.S.). Canada has about 5 per cent of the votes on the ADB and any company in a member country can bid on contracts related to ADB projects. Contracts for goods and services awarded to Canadian companies since the bank was founded total nearly $300 million and consulting contracts just over $100 million.
HOURS
France's parliament has passed a law to reduce the working week from 39 to 35 hours starting in 2000.
CARGO
Bulk carriers will soon have to toughen up to meet strict new international guidelines aimed at stopping disasters at sea. The rules, which will take effect July 1, 1999, will force companies to strengthen the bulkheads that separate the front two cargo holds, hopefully preventing vessels from sinking if water gets inside. Because Canada is a frequent port of call for many carriers, it will be up to inspection officials to do more checks. Canada will be able to refuse entry to below-standard ships or delay them until the necessary changes are made.
GROWTH
Mexico has posted its strongest economic growth in 16 years with a 1997 GDP increase of 7 per cent. Analysts are impressed at growth that defied banking sector weakness and a consequent credit squeeze. Last year's performance was helped by positive oil prices, an energetic effort to use up industrial capacity and a predicted downturn in the U.S. economy which never materialized.
PETS
A pet retirement home is being built in Westhampton, N.Y. Though still a hole in the ground, 2,000 pet owners have already asked for applications. There is room for only 50 cats and 50 dogs in the retirement home which has air conditioning and heated floors. $10,000 pays for perpetual care and burial.
DEBT
U.S. consumers spending is at record heights and is being financed through credit at ever increasing rates. According to the U.S. Federal Reserve Board, Americans owe a staggering $1.24 trillion in automobile and revolving credit, double the debt load they had in 1991. On plastic alone, they owe about $523 billion, almost as much as the total of insolvent loans racked up by the troubled Asian countries. Average per capita credit card debt is $7,000 and most Americans have 7.5 credit cards. The cards are lucrative for their issuers. The average interest rate is 16 per cent but some are as much as 22 per cent.
TRANSPORTATION
U.S. customs officials are rethinking a proposed rule change that Canadian truckers say could cause costly inconvenience for shippers. The draft regulation would give local U.S. border officials the power to redirect traffic entering the U.S. If implemented, the new rule could cost millions of dollars. A detour of only 50 kilometres could add more than $60.00 to the cost of a typical international load. Trucks handle about 70 per cent of Canada-U.S. trade.
AFRICA
When companies think of expansion, sub-Saharan Africa is not usually the first place that comes to mind. But a new Harvard study of 20 successful companies concludes it is possible for firms to overcome the region's many obstacles if they think creatively about solutions and make an effort to understand the local environment. The report suggests that Africa may well be the last business frontier.
INSTRUCTIONS
Some product advice noted by the New Scientist:
-(Airline peanuts) "Instructions: Open packet, eat contents."
-(Swedish chainsaw) "Do not try to stop chain with hands."
-(European camera) "This camera only works when there is a film inside."
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
While the proportion of households with a vehicle remained unchanged over the last 10 years the real change occurred in the type of vehicle Canadians were driving. In 1987, 78% of households reported having an automobile and only 23% had a van or truck. By 1997, automobile ownership had dipped slightly to 72%, while van or truck ownership had increased to 33%. The minivan popularity of the early 1990s and the more recent appeal of four-wheel drive vehicles may explain this shift. New motor vehicle sales data show that, on a seasonally adjusted basis, sales of trucks, vans, and buses increased 21% between May 1996 and May 1997.
SHOPPERS
Crowds are the No. 1 complaint of shoppers: 26 per cent cited the problem in a survey by Decima Research for the Retail Council of Canada and American Express. Other pet peeves were high cost of goods (19 per cent), the time involved (17 per cent), bad service and long lineups (7 per cent each) and poor selection (5 per cent). The council suggests retailers do whatever it takes to make shopping less painful. Store employees should be quick, products must be easy to find and checkouts should be free of lineups, it says.
FAMILY FOOD
Average Canadian expenditure on food remained virtually unchanged between 1992 and 1996. The average household spent $112.09 a week on food purchased in grocery stores or restaurants, compared with $110.44 in 1992. One reason that household expenditure on food rose only slightly was due to a 6.5% decline in spending on restaurant meals. Households spent on average 5.0% more on food purchased from stores in 1996 compared with 1992. Provincially, the average weekly food expenditures were lowest in the east and highest in the west. In 1996, the average for households in New Brunswick was $97.31 a week on food while households in B.C. spent on average $121.73 a week, 20.1% higher. Households spent 27.8% of their weekly food budget on restaurant meals in 1996, compared with the 30.2% in 1992.
TRENDS
A major Canadian supermarket chain has launched a new product----banking services for its customers. Modeled on a similar service offered by some grocery stores in Britain, it will provide debit cards, credit cards, savings accounts and access to automated teller machines and telephone banking. The new venture will also feature some in-store kiosks. Banking customers will get loyalty points they can use towards groceries. Chains in Britain have signed up hundreds of thousands of banking customers. Supermarkets have also become more prominent on the U.S. banking scene, where thousands of in-store branches have sprung up and are generally successful.
TRAVEL
After four years of haggling, Japan and the United States reached an agreement on dividing up the $10 billion Transpacific airline market. But European airlines are likely to challenge some of the details of the deal, which still seems to favour American airlines at others' expense.
CONSULTING
According to the Kennedy Research Group which tracks the consulting industry, the worldwide management consulting business is expected to grow by nearly 60 per cent to about $114 billion (U.S.) by the year 2000, driven by technological change and globalization of the marketplace. They expect information technology to account for 70 per cent of consulting work by 2000, an increase from 64 per cent now.
SKILLS
A new Ontario survey says skilled trade jobs are highly valued, but that sentiment isn't prompting youngsters to enter these fields in big numbers. More than half of the 525 interviewees to the Ernst & Young Poll said they would encourage young people to take up a trade. Many industries could soon face severe labour shortfalls in the skilled trades. The study suggests more needs to be done to get the word out about these potential job opportunities.
SENIORS
Having bought a digital organizer and finding it hard to use because the instructions were confusing, the buttons too tiny and its labels so small they could not be read, an Illinois entrepreneur has formed an evaluation company (www.seniorfriendly.com on the Internet) that rates consumer electronics and home appliances according to their ease of use for people 50 and over, of which there are more than 69 million in the U.S. Currently, the website recommends only two VCRs out of 14 units it has tested and 3 out of 15 camcorders. Products are tested against six criteria: Friendliness of packaging, assembly instructions, assembly, operating instructions, operations and routine servicing.
DEALERS
The U.S. has 22,650 automobile dealers and their net profit margins are a modest 1.5 per cent of total sales. The net profit on each of the 15 million new vehicles sold last year in the U.S. was $300 before discounts. New cars, which 20 years ago used to bring in most of the profits, now account for barely 10 per cent of the total. The rest comes from used cars (an estimated 40 million were sold last year), servicing and finance. About 850 dealerships have disappeared in the last five years and it is estimated that there will only be around 11,000 in five years time.
LABOUR
Plantation owners in Thailand are not replacing people with machines, they are giving the work to monkeys. In some Thai villages up to 10 per cent of the land is devoted to growing coconuts which are harvested each month and produce up to 70 coconuts a year. A workforce of several thousand monkeys in southern Thailand help pick the country's crop of 1.5 million tonnes of coconuts. Villages often have at least one monkey per household and the animal is rented out to the local plantation at a modest fee. A well trained monkey can change hands for up to $400. This is a bargain for a plantation owner who spends just $12 a month on "wages" of eggs, rice and fruit. Working monkeys are given names, groomed, bathed and fed three times a day.
LUMBER
According to the Canadian Lumbermen's Association, China is opening up as a big market for Canadian lumber, helping to offset slumping demand in countries hit by the Asian currency crisis. The Chinese government has rescinded 15-year-old restrictions on the use of lumber and wood products in construction. The country had wanted to conserve its wood supplies but now realizes that most of the wood used in China is for cooking and heating, not construction.
NEWSPAPERS
After years of decline, newspaper circulation in Canada appears to have stabilized. The Canadian Newspapers Association, the main lobby group for the country's 105 daily newspapers, reports that 32.96 million copies a week were sold across Canada in 1997, just slightly below the 34.03 million sold in 1996. Until 1997, circulation fell every year in the 1990s.
2000
Most of Canada's stock exchanges are moving to force public companies to disclose the risks that the Year 2000 computer problem poses for them. Companies that refuse to comply could face sanctions raging from a $1-million fine to a cease-trade order. In the U.S., the Securities and Exchange Commission has already put in place disclosure rules which require public companies which have substantial Year 200 problems to disclose their costs and plans this spring. The SEC guidelines cover about 12,000 public corporations, 400 investment companies and thousands of investment-advisor firms.
ADB
Canada is the second largest non-Asian contributor to the Asian Development Bank and the sixth largest out of 56 members. Canada's capital subscription is $2.57 billion (U.S.). Canada has about 5 per cent of the votes on the ADB and any company in a member country can bid on contracts related to ADB projects. Contracts for goods and services awarded to Canadian companies since the bank was founded total nearly $300 million and consulting contracts just over $100 million.
HOURS
France's parliament has passed a law to reduce the working week from 39 to 35 hours starting in 2000.
CARGO
Bulk carriers will soon have to toughen up to meet strict new international guidelines aimed at stopping disasters at sea. The rules, which will take effect July 1, 1999, will force companies to strengthen the bulkheads that separate the front two cargo holds, hopefully preventing vessels from sinking if water gets inside. Because Canada is a frequent port of call for many carriers, it will be up to inspection officials to do more checks. Canada will be able to refuse entry to below-standard ships or delay them until the necessary changes are made.
GROWTH
Mexico has posted its strongest economic growth in 16 years with a 1997 GDP increase of 7 per cent. Analysts are impressed at growth that defied banking sector weakness and a consequent credit squeeze. Last year's performance was helped by positive oil prices, an energetic effort to use up industrial capacity and a predicted downturn in the U.S. economy which never materialized.
PETS
A pet retirement home is being built in Westhampton, N.Y. Though still a hole in the ground, 2,000 pet owners have already asked for applications. There is room for only 50 cats and 50 dogs in the retirement home which has air conditioning and heated floors. $10,000 pays for perpetual care and burial.
DEBT
U.S. consumers spending is at record heights and is being financed through credit at ever increasing rates. According to the U.S. Federal Reserve Board, Americans owe a staggering $1.24 trillion in automobile and revolving credit, double the debt load they had in 1991. On plastic alone, they owe about $523 billion, almost as much as the total of insolvent loans racked up by the troubled Asian countries. Average per capita credit card debt is $7,000 and most Americans have 7.5 credit cards. The cards are lucrative for their issuers. The average interest rate is 16 per cent but some are as much as 22 per cent.
TRANSPORTATION
U.S. customs officials are rethinking a proposed rule change that Canadian truckers say could cause costly inconvenience for shippers. The draft regulation would give local U.S. border officials the power to redirect traffic entering the U.S. If implemented, the new rule could cost millions of dollars. A detour of only 50 kilometres could add more than $60.00 to the cost of a typical international load. Trucks handle about 70 per cent of Canada-U.S. trade.
AFRICA
When companies think of expansion, sub-Saharan Africa is not usually the first place that comes to mind. But a new Harvard study of 20 successful companies concludes it is possible for firms to overcome the region's many obstacles if they think creatively about solutions and make an effort to understand the local environment. The report suggests that Africa may well be the last business frontier.
INSTRUCTIONS
Some product advice noted by the New Scientist:
-(Airline peanuts) "Instructions: Open packet, eat contents."
-(Swedish chainsaw) "Do not try to stop chain with hands."
-(European camera) "This camera only works when there is a film inside."
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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