Volume 94, Issue 61

Thursday, January 11, 2001


Ontario finishes dead last - Education ranking puts province on defensive

Former prof talks politically incorrect

Economy slows down slightly: Ivey survey

What recession? City booms

New tax to create safety net

Drug testing could hit human rights violation snag

New club sets sights on stock market skills


Planet Me

Economy slows down slightly: Ivey survey

By Mike Murphy
Gazette Staff

Survey results released by The Richard Ivey School of Business on Monday suggest Canada's economy experienced a slowdown in growth in December, but financial observers dismissed suggestions of an imminent economic downturn.

Fraser Johnson, assistant professor at Ivey and a co-ordinator of the business school's new Purchasing Managers Index, said according to the PMI, economic activity increased in December, but not at the same rate as during the previous month.

"I'm not here to preach that there's going to be a recession," he said in reference to the PMI's slight decrease this month .

He explained the survey asks 175 Canadian companies to provide data on whether they have increased or decreased spending in various areas each month. By interpreting those data, analysts arrive at a figure that, if over 50, indicates economic growth and, if under 50, means contraction.

December's index was 56.1, a small drop from November's figure of 58.9, Johnson said.

Despite pessimistic forecasts from US investment firm Morgan Stanley Dean Witter & Co. that Americans could face a recession soon, a senior economist at TD Bank Financial Group in Toronto said Canadians probably have little to fear, at least for the time being.

"Where these risks are emerging is in the US and not in Canada," TD's Marc Levesque said, adding the American statistical equivalent to the PMI stood at 43.3 for December, indicating a decrease in activity.

"If you look at the economic indicators, then Canada is doing pretty well – we're still running at twice the pace of the US."

But, Levesque also said an American slowdown would have consequences for Canada. "If there's a recession in the US, we're not going to escape it here," he said.

Economists conventionally define a recession as two consecutive quarters of negative growth in a country's gross domestic product, Levesque explained.

Chair of the London Downtown Business Association, Lindsey Elwood, said business conditions generally appear to be good.

Elwood also said he expects the number of building permits issued to rise this year, as construction proceeds on the new downtown arena.

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