I found a printout of an article titled
Predicting the Retail Bounce-Back while cleaning my office last week. Published on
www.portfolio.com on April 7th, the article ended with a "Recovery Checklist" that summed up what its writers consider to be "possible signs the bottom has been reached and a genuine recovery is under way." They are:
1. Higher employment
2. Stabilized financial institutions with new rules
3. Improvements in the flow of credit
4. Pickup in the housing market
5. Sustained stock market comeback
6. Resumption of growth in sales and profits
7. Disposal of toxic assets
8. Higher consumer confidence and spending
I am heartened by the fact that Canada seems to be holding its own on four of these signs.
Statistics Canada reported on Friday that employment grew by 36,000 in April, largely as a result of an increase in self-employment. Granted 36,000 is not a huge number compared to the 321,000 jobs lost since October and for many, self-employment will not be as consistently lucrative as salaried work. But, at least, the unemployment rate (8%) remained the same unlike the U.S. where it continues to climb. So maybe we don't get a checkmark on the list but we don't get a big X either.
We also have the good fortune to live in a country that regulates its banks more rigorously than do our neighbors to the south so we can proudly check off #2. Then there's #4. On Thursday, May 7, 2009,
The Toronto Star reported that the housing resale market in the Greater Toronto Area is improving. Business reporter Tony Wong wrote that "improved affordability, mostly because of lower mortgage rates and a drop in home prices have brought out
buyers in greater numbers than expected." We're also making progress on #8. On April 23rd,
TNS Canadian Facts released the results of its latest Consumer Confidence Index. The news was good. Its Consumer Confidence Index was up 8 percent; the Present Situation Index was up more than 3 points; the Expectations Index was up 11 percent; and the Buy Index was up 9 percent.
Of course, that leaves four significant areas we're falling short on. I hope the coming months bring improvements in the flow of credit; a sustained stock market comeback; resumption of growth of sales and profits; and "disposal of toxic assets." However, as several of the retailers and experts interviewed for the portfolio.com article pointed out, no-one has a crystal ball. I certainly don't. But, I do believe that while the Canadian economic cup might not be half full, there's reason to believe that it's sitting upright on the table, ready to be filled again. Let's hope that that's a beginning.
