slow_growth   20

Hard sell for the ad men
| Financial Times |

Consumer goods groups are cutting costs amid slowing growth – the advertising industry is first to feel the pinch
CPG  cost-cutting  shareholder_activism  advertising  Big_Food  advertising_agencies  P&G  bots  marketing  budgets  Unilever  ABInBev  Mondelez  WPP  Interpublic  brands  Nestlé  slow_growth 
august 2017 by jerryking
Canada beware: We are suffering a great depression in commodity prices - The Globe and Mail
MICHAEL BLISS
Special to The Globe and Mail
Published Friday, Jan. 15, 2016

The Great Depression of the 1930s used to be understood as a worldwide structural crisis that was partly an adjustment to the great expansion of crop acreage and other primary industries undertaken to meet the demands of the First World War. Unfortunately the history of those years now tends to be viewed through the distorting lenses of economists fixated on monetary policy and financial crisis management.

They thought that the crisis of 2008 might become a replay of the 1930s. For the most part they have not realized that it is today’s global depression in commodity prices that has eerie echoes of the great crack-up. If it’s true that we have overexpanded our productive capacity to meet the demands of Chinese growth, and if that growth is now going to slow, or even cease, then history is worrisomely on the verge of repeating itself....One sign of the beginning of wisdom is to be able to shed illusions. Make no mistake. Right now, the world is experiencing a great depression in commodity prices, led by the collapse of oil, that represents an enormous shrinkage in the valuation of our wealth. As a country whose wealth is still highly dependent on the returns we can get from selling our natural resources, Canada is very vulnerable. In a time of price depression, our wealth bleeds away.
'30s  adjustments  commodities  commodities_supercycle  economic_downturn  Great_Depression  historians  history  illusions  Michael_Bliss  natural_resources  overcapacity  pricing  overexpansion  slow_growth  wisdom  WWI 
january 2016 by jerryking
Jeffrey Simpson: Slow growth now, no growth later - The Globe and Mail
JEFFREY SIMPSON
Slow growth now, no growth later
SUBSCRIBERS ONLY
The Globe and Mail
Published Wednesday, Jan. 13,2016

The population is aging. Commodity prices are low. Oil and natural gas prices are hitting rock-bottom. The Canadian dollar has plummeted. Most governments are in deficit, or heading into deficit (read Ottawa). Innovation and the commercialization of research lag that of other countries. Productivity, the country’s long-term bugbear, remains sluggish....all the green traffic signals have turned to yellow or red. Yet this slow-growth economy, which might persist for a long time, is wrapped in a political culture that seems to favour slow or no growth, or seems to think that government infrastructure programs, useful in themselves, will solve the long-run problems.....Everywhere, projects are blocked or delayed, because environmentalists, aboriginal people, non-governmental organizations or even provincial governments oppose them....Many of these blocked or delayed projects with large-scale economic spinoffs are natural resource projects, which the federal government says might be saved with more “robust” oversight. The government is kidding itself in this belief, since the opponents don’t care what the regulatory process is. They oppose development pure, simple and always.

Far beyond natural resource constipation, the contradiction arises between slow growth and the huge desire of citizens for more government services, without higher taxes. Of special concern is Canada’s persistent low productivity, to which no easy answer exists, except that a slow-growth mentality doesn’t help.

...Don Drummond, working with Evan Capeluck, recently explained the challenge in a paper for the Centre for the Study of Living Standards, which looked at productivity trends in all provinces. Projecting these trends forward, they said most provinces and territories will not be able to balance revenue growth with new spending demands (especially for health care) without higher taxes or spending cuts.

Put another way, unless long-term growth can be improved – a trend that will require productivity improvements – Canada is heading for a poorer future with fewer programs and/or higher taxes.
growth  Jeffrey_Simpson  economic_downturn  anti-development  natural_resources  economic_stagnation  megaprojects  productivity  Don_Drummond  slow_growth  low_growth  weak_dollar  signals 
january 2016 by jerryking
Economic stagnation is here to stay - The Globe and Mail
LAWRENCE MARTIN
Special to The Globe and Mail
Published Tuesday, Apr. 14 2015

The bleak economic predicament hasn’t received much attention. Seems we’re living under an illusion that we’re doing reasonably well, the reason being that until the recent oil price plunge the Conservatives pushed out a lot of feel-good messaging about Canada faring better in the wake of the global financial crisis than other major economies. But doing better than some rivals doesn’t necessarily mean you’re doing well yourself.

Over and above the energy price fall, experts cite a range of causes for the inertia. A major one is productivity. “On that, we’re doing terribly relative to our own historic rate,” said economist Don Drummond, “and we’re doing terrible relative to the rate of almost every developed country.”

Our business class, he added, is neither aggressive nor entrepreneurial, consumer demand is inhibited by high household debt and we have an aging labour force that is only going to grow at about 1 per cent a year. The small increase will come from immigrants, who make lower wages.

“I don’t look for growth to be above 2 per cent on an average basis, I’d say, for the next 10 years,” Mr. Drummond said.
economics  Lawrence_Martin  economic_stagnation  slow_growth  Don_Drummond  productivity  economists  Christopher_Ragan  the_Great_Decoupling 
april 2015 by jerryking
Lawrence H. Summers: ‘There are many ways of burdening our future’ - The Globe and Mail
RUDYARD GRIFFITHS
Special to The Globe and Mail
Published Friday, Mar. 20 2015

Lawrence Summers: confidence is the cheapest form of stimulus.

If a young person asked you, ‘How do I thrive in a low-growth economy?’ what would your advice be?

It’s never been more important to be comfortable with technology, to be well-educated, to not just know things, but know how to learn, and develop a set of distinctive skills that employers can value. For people who are able to do those things, the combination of technology and global markets will make this a moment of immense opportunity........There are many ways of burdening the future. One is to borrow money – though, given how low interest rates are, those burdens aren't that great. Another is to defer maintenance. Those costs accumulate at a much greater rate, and that's why I think infrastructure investment is so very important. Another way to burden future generations is to scrimp on education. Another way is to fail to invest in basic scientific research. Another way is to saddle them with huge pension liabilities for those who are working, serving the public today. We are doing all those things.
advice  America_in_Decline?   automation  confidence   deferred_maintenance  downward_mobility   economic_stagnation   economic_stimulus   economy  growth  infrastructure  Larry_Summers   leaps_of_faith    low_growth  new_graduates  Rudyard_Griffiths   skills  slow_growth  technology  the_Great_Decoupling  
march 2015 by jerryking
Ontario will eventually have to pay the piper - The Globe and Mail
JEFFREY SIMPSON
The Globe and Mail
Published Saturday, Dec. 13 2014,

Fortunately, Bonnie Lysyk, the province’s Auditor-General, is not beholden to the vagaries of politics and speaks truth both to power, where it most likely will not be heeded, and to the general public, where it will be ignored. As she plaintively wrote in a report this week, the office has been warning about the debt for three years but “has attracted little public attention.”

The AG urged “legislators and the public to start a conversation about paying down the province’s total debt.” Note the words “paying down.” Not stabilizing, but reducing. A tall order.

The AG’s numbers were stark. Even if the government balances the books by 2017-18 (which is rather implausible), net debt will have more than doubled in a decade....The AG could have added three other factors that will make Ontario’s situation even more difficult than the report conveyed.

First, the population is aging, and aging comes with more costs for the government. Second, health care is now rising at just 2 per cent a year (compared to about 7 per cent from 2000 to 2010). It’s doubtful that this modest rate of increase can be sustained. Third, the population’s aging will contribute to lower rates of economic growth, which in turn will crimp government revenues at current levels of taxation.
debt  Jeffrey_Simpson  Ontario  aging  slow_growth  auditors  speak_truth_to_power  grey_tsunami 
december 2014 by jerryking
Five things all Canadian cities should stop ignoring
Aug. 20 2014 |The Globe and Mail | JEFF LEHMAN.
1. Don’s World
2. Resiliency.
3. Affordable housing.
4. Slaying the infrastructure deficit.
5. A new federalism.

Don's world = that Ontario governments need to adjust to revenues growing more slowly by reforming services and changing the way they do business. Cities must listen to this advice. This goes beyond controlling costs; services must be delivered differently if they are to be sustainable.
affordable_housing  affordability  Canadian  cities  Don_Drummond  federalism  infrastructure  mayoral  municipalities  P3  public_housing  public_sector  resilience  slow_growth  strategic_thinking  urban 
august 2014 by jerryking
Ontario’s ‘none of the above’ election - The Globe and Mail
JEFFREY SIMPSON
The Globe and Mail
Published Saturday, May. 24 2014

Start with economic growth after inflation. From 1982 to 2013, it averaged 2.6 per cent. From 2014 to 2035, it will be 2.1 per cent. Roughly speaking, therefore, growth will be about 20 per cent slower.

The labour force will grow more slowly largely because of an aging population, a change being felt throughout Canada. Labour productivity will be flat at best, and quite likely lower than from 1985 to 2000. In the meantime, global competition will intensify.

Manufacturing has been declining as a share of the economy in North America and Western Europe. Ontario’s decline was halted temporarily back when the Canadian dollar plunged to nearly 60 cents, but those days are long gone.

The province’s cost competitiveness – this is one of the two or three central challenges – has been poor. Unit labour costs have gone up by a little over 5 per cent per year over the last 13 years, compared with just over 2 per cent in the United States.

When a province’s unit labour costs rise more than twice as fast as the country where it does 78 per cent of its trade, the results are obvious: plant shutdowns, unemployment and not enough new capacity added. Automobiles are the classic case: plant openings in Mexico and the U.S., but none recently in Ontario.

Business investment in machinery and equipment has lagged the Canadian average and is far below the United States. Research and development, a pathway to innovation, also lags. It’s better than the very poor Canadian average, but far below the U.S. Take away the healthy financial sector and the Toronto’s overheated housing market, and what do you have?

In Toronto and Ottawa, where prosperity is sustained, it’s easy to forget the swaths of the province in the southwest, north and east, where very little new economic activity has been taking place. The old industrial cities – Hamilton, Windsor, St. Catharines, Thunder Bay, Sudbury, Sault Ste. Marie – and smaller cities, such as Leamington, are nearly all suffering in one form or another.

For most of the past quarter-century, Ontario provincial governments have run deficits. Slowly, the debt has risen. Such is the situation that Ontario now receives yearly small payments from the country’s equalization scheme. (And such is the absurdity of the scheme that Ontario taxpayers remain net contributors to Ottawa, which then turns around and gives a small portion of the revenues back in equalization.)

The Ontario government has reached far, but failed to execute: clean energy, gas plants, e-health, Ornge air ambulance, nuclear cost overruns. No wonder trust in government is low. For almost a decade, the Liberal government let health-care spending rip – 7-per-cent yearly increases without commensurate improvements in the system. (Spending increases are now down to 2.5 per cent a year.)

Very, very powerful – and very, very conservative – public-sector unions and associations in schools, universities, health care, policing, firefighting and municipal government make change very, very difficult.
Ontario  elections  turnout  Jeffrey_Simpson  challenges  long-term  slow_growth  low_growth  Queen’s_Park 
may 2014 by jerryking
On Wall Street, No Place Like Home - WSJ.com
Nov. 13, 2013 | WSJ| By Justin Baer and Julie Steinberg.

Across Wall Street, bankers, traders and other employees are finding fewer reasons—or opportunities—to leave. Waves of consolidations and layoffs, both before and since the financial crisis, have left people with fewer places to go. Muted economic growth, a rise in the amount of bonuses that are deferred for a few years and stiffer rules on risk-taking have given Wall Street firms little incentive to hire aggressively.

And while hedge funds and private-equity firms have long taken in Wall Street refugees, they aren't hiring as much as they used to, experts said.

"It's not that easy to go,"
Wall_Street  Goldman_Sachs  tenure  slow_growth 
november 2013 by jerryking
WHOLESALE The real squeezed middle?
From dealing with ongoing margin pressure in a low growth environment, to dealing with higher customer expectations,
and mounting concerns about the black market, the challenges facing wholesalers are considerable. However, the picture is not all gloom. Opportunities still exist for operators able to supply goods in line with changing industry trends, while maintaining a low cost base. Increasingly this will be through supply chain integration and enhanced service levels. But, ultimately winners will be wholesalers that can effectively reinvent themselves by developing new
hooks into their customers.

Demand is highly influenced by end user trends. However, wholesalers only have limited ability to respond quickly.

The ability to source and alter stock in line with changing trends is vital, especially in terms of broadening of the
product range.

Wholesale is generally a high volume low margin industry with operating margins of only 1-2%.

Margins are constantly being squeezed. Bargaining power in many consumer goods markets has been weakened by
powerful manufacturers and dominant retailers.
responding to end-user trends
margin pressure

Most wholesalers now offer a range of new added value services. White label provision and web integration
increasingly common

Service level agreements increasingly tight

Symbol groups have become more popular across the grocery sector, with increased investment in own-label
development. In other sectors branding has never been more important.

The introduction of tightly-managed production techniques has resulted in greater sophistication in distribution
chains

Wholesalers are now expected to have systems in place to run goods direct from production plant to end-users

Disruption in overseas supply chains caused by ‘growing pains’ in emerging markets is becoming increasingly
common.
enhanCed serviCe levels supplY Chain integration

The black and grey markets, and fraud in general is on the increase. Alcohol duty fraud is a particular concern

Sourcing from correct brand owners is becoming more difficult. Fines for the possession of fraudulent stock are
becoming more severe.
fruits  vegetables  wholesalers  challenges  problems  margins  supply_chains  fresh_produce  OPMA  slow_growth  black_markets  low_growth  customer_expectations 
october 2013 by jerryking
Retailers warn of spreading ‘bloodbath’ - The Globe and Mail
Sep. 17 2013| The Globe and Mail | MARINA STRAUSS - RETAILING REPORTER.

The added stress is felt acutely in Canada’s grocery industry, which is the victim of an essentially “zero-sum game,” Perry Caicco, retail analyst at CIBC World Markets, said in a recent report. He projects that sales will pick up by about $1.6-billion this year – with little or no inflation – but that sales tied to the expansion of retail floor space “will eat up most of the sales growth.” As a result, grocers can expect almost no real sales increases this year or next at stores open a year or more, a critical retail measure, he warned.

“The market is not easy,” said Vicente Trius, president of Loblaw Cos. Ltd., which this summer unveiled its massive $12.4-billion deal to acquire Shoppers Drug Mart Corp. to help take on rivals.

“This generates pressure in the market because you have a consumer who spends less,” Mr. Trius said.....Retailers are also teaming up with others to gain economies of scale and round out their businesses. About a month before Loblaw announced its deal for Shoppers, Sobeys said it would buy Safeway Canada for $5.8-billion to help bolster its foothold in Western Canada.
competitive_landscape  retailers  Marina_Strauss  Loblaws  Wal-Mart  Costco  Target  Rona  slow_growth  economies_of_scale  zero-sum_game  mergers_&_acquisitions  M&A 
september 2013 by jerryking
Research: Menu innovation should be a priority
Dec 17, 2012 | Nation's Restaurant News | Fern Glazer.

Sluggish traffic growth has been a major problem for the restaurant industry in recent years, with many concepts plagued by year-over-year dec...
menus  innovation  restaurants  foodservice  brands  statistics  food  slow_growth  from notes
april 2013 by jerryking
Go Ahead, Take a Risk
June 22, 2004 | WSJ | By ADRIAN SLYWOTSKY

What are the risks you should be taking but aren't? Most managers treat risk as an unwanted byproduct of the business. They think narrowly of financial, operating, and hazard risks, such as currency fluctuations, employee fraud, and earthquakes. And they defend themselves through practices like hedging, internal controls, and insurance.

But disruptive strategic risks can be a much larger source of value destruction for a firm. I looked back to the bull market of the 1990s to analyze movements of the Fortune 1000 stocks; even then, before the market collapsed, 10% of stocks lost over one-quarter of their value in a single month, primarily because of strategic-risk events.

The most successful companies do not try to simply minimize strategic risk; they embrace such risk by making prudent bets in their growth-oriented strategies. Strategic risks include not just the obvious, high-probability events that a new ad campaign or new product launch will fail, but other less-obvious risks as well: Customers' priorities will change quickly -- as when baby-boomer parents quickly migrated from station wagons to minivans, catching most automakers off guard. New technology will overtake your product -- as mobile telephony has stolen market share from fixed-line voice. A one-of-a-kind competitor will render your business model obsolete -- as the Wal-Mart tidal wave has washed over mid-range department stores.

Although insurance and hedging can't address strategic risks, there are an array of countermeasures that can, including these three:
1) Smart sequencing for new growth initiatives. Look for incumbents that are moving deliberately, leveraging existing assets and customer relationships to gain the experience, knowledge, and reputation necessary to take the next step with confidence.
2) Proprietary information to reduce the risk of each new initiative. Gather and generate proprietary information that produces a depth of insight into the customer's needs and activities that traditional suppliers cannot match. This will make you a supplier of choice, reducing bidding volatility and allow you to plan with greater certainty.
3) Double betting to minimize the risk of obsolescence. When several versions of a new technology are competing to become the standard, it's impossible to predict which will prevail. So smart managers make double bets. Betting on both Windows and OS/2 positioned Microsoft to be the winner, regardless of which operating system prevailed.

Traditional risk management seeks to contain losses. But that's just one-half of the growth equation. By embracing strategic risk, Cardinal, JCI, and other risk-savvy companies have raised their growth potential in addition to reducing their economic volatility. That's important at a time when aggregate market growth is sluggish: The biggest risk of all is not to take the right growth risks for the business.
leaps_of_faith  Adrian_J._Slywotzky  risk-taking  proprietary  sequencing  scuttlebutt  information  growth  strategic_thinking  Mercer  Oliver_Wyman  product_launches  nonpublic  low_growth  slow_growth  insights  customer_insights  value_destruction  disruption  insurance  new_products  obsolescence  countermeasures  volatility  customer_risk  one-of-a-kind  hedging  overly_cautious  risk-aversion  de-risking  double_betting  risk-management  bull_markets  customer_relationships  dark_data  risk-savvy  internal_controls  financial_risk  risks 
june 2012 by jerryking
GE Chief Charts His Own Strategy - WSJ.com
September 23, 2003 | WSJ | By CAROL HYMOWITZ.

"We're living in a world of more volatility, higher environmental risks and slower growth," says Mr. Immelt. "Companies that depend just on acquisitions to get growth will be left behind. The only way to get growth is to differentiate oneself with new products and services."
Carol_Hymowitz  GE  Jeffrey_Immelt  slow_growth  new_products  risks  volatility  differentiation 
march 2012 by jerryking
The Experience Economy - NYTimes.com
February 14, 2011| NYT| By DAVID BROOKS. Tyler Cowen’s e-book,
“The Great Stagnation,” has become the most debated nonfiction book so
far this year. Cowen’s core point is that up until sometime around 1974,
the American economy was able to experience awesome growth by
harvesting low-hanging fruit. There was cheap land to be exploited.
There was the tremendous increase in education levels during the postwar
world. There were technological revolutions occasioned by the spread of
electricity, plastics and the car. But that low-hanging fruit is
exhausted, Cowen continues, and since 1974, the United States has
experienced slower growth, slower increases in median income, slower job
creation, slower productivity gains, slower life-expectancy
improvements and slower rates of technological change.
David_Brooks  book_reviews  books  economic_stagnation  technological_change  downward_mobility  economists  economic_downturn  the_Great_Decoupling  slow_growth  '70s  experience  experience_economy 
february 2011 by jerryking
Where Billionaires Are Putting Money
September 15, 2010 | The Wealth Report - WSJ | By Robert
Frank. What was being served up this year? Gloom, doom and complaints
about the Obama administration. Mr. Wien writes in his market
commentary that: “the group was gloomy on the outlook despite the
comfort of the surroundings. They saw the United States in a long-term
slow growth environment with the near-term risk of recession quite real.
The Obama administration was viewed as hostile to business and that
discouraged both hiring and investment.”... " What was surprising about
the lunch was where the attendees are putting their money. Topping the
list were vacant office buildings, farmland and Africa. Stocks look
attractive, but the attendees pointed out that no one has made money
investing in the indexes for 12 years. “Few were enthusiastic on gold.
Many liked Brazil and some favored India.” "
high_net_worth  Robert_Frank  TIGER21  investment_advice  obama  farmland  Africa  Brazil  wealth_creation  slow_growth 
september 2010 by jerryking
Editor's Note - WSJ.com
OCTOBER 25, 2004 | Wall Street Journal | Lawrence Rout. In this
second Leadership report, we move on to step No. 2. And the challenges
are no less daunting -- or crucial.
So each article in this report examines a particular approach to growth.
Does the conglomerate model make sense? What are the pros and cons of
vertical integration? How about looking for growth online? Is it wise to
try to cash in on what may be a passing fad? Or maybe it's best to
expand via franchising. Do serial acquirers tend to be successful?
Perhaps the best way to grow is to do it slowly -- or not grow at all
for a while.
leadership  questions  growth  slow_growth 
february 2010 by jerryking
As Growth Slows, Ex-Allies Square Off in a Tech Turf War - WSJ.com
MARCH 16, 2009 | Wall Street Journal | by BEN WORTHEN and
JUSTIN SCHECK

Maturing tech industry is setting companies on a collision course, as
once-disparate technologies take on new capabilities in a "convergence"
of computers, software and networking. With the recession expected to
shrink sales across the industry, tech companies are turning on each
other in their search for growth.
Cisco  growth  competitive_landscape  HP  servers  Ben_Worthen  recessions  slow_growth  mature_industries 
march 2009 by jerryking

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