Our Economy

[chazz_matzz]

I am starting to feel like our local economy has been taking a downward turn lately;

I am in the Automotive business and it would seem that all parts of the business parts, service and sales are having a tough time regardless of the Brand.

I have also seen many other business being more competitive, having longer hours, more promotions ect ect

Even as of lately seeing existing agencies offering lower rates and Outcall agencies offering Incalls.

Curious to see other peoples insight?

 

[Papi Chulo]

just wait until interest rates go up a little more & people cannot afford to renew their mortgages


just wait until we start importing cars from China because it costs too much to produce them here

the day is coming!

 

[Keebler Elf]

From what I understand, the economy as a whole is doing just fine. But manufacturing is getting hit hard, especially with the high Canadian dollar.

To say our economy is in decline though? I don't think so. I don't see it.

 

[hoser1970]

just wait until interest rates go up a little more & people cannot afford to renew their mortgages

I agree Papi!

Western Canada, especially Alberta, is doing great. However, this is driving inflation, so the Bank of Canada continues to raise interest rates to try and control it. Unfortunately, this hurts the Ontario's manufacturing sector. It also drives the cost of borrowing up.

I give it 2-3 years max, before we see enough people who have mortgages coming up for renewal and realize they can't afford the payments at the current interest rates. We so many people having taken advantage of 5% down and even 0% down payments, or going into variable rate mortgages without understanding the risks associated with these products. many people will simply choose to walk away from their "homes". This is what happened in the eighties when interest rates skyrocketed, and most homeowners then had far more invested in their homes, since the programs mentioned above didn't exist back then.

When this happens, watch for a major burst in the real estate bubble.

 

[Papi Chulo]

Western Canada, especially Alberta, is doing great.

Lets only look at the economy in Ontario, not the Canadian economy.

How rosy is the picture now??

Is the economy stagnant or has it seen negative growth yet?

 

[chazz_matzz]

just wait until interest rates go up a little more & people cannot afford to renew their mortgages


just wait until we start importing cars from China because it costs too much to produce them here

the day is coming!

As for the part about Chinese cars....there was a company that offered low low priced cars in Canada in the last 20 years....

The cars were junk and they left the market


LADA....a fine Russian vehicle!!

You get what you pay for!

 

[Papi Chulo]

As for the part about Chinese cars....there was a company that offered low low priced cars in Canada in the last 20 years....

I think it is just a matter of time until the Big 3 move production to China... I did not say they would be lower priced cars... as it is a way for the Big 3 to dramatically increase their profit margins

I believe that Chrysler was already involved in talks with the Chines government, where the Chinese government offered to pay any duties on vehicles going to North America

It is only a matter of time!

 

[chazz_matzz]

They have already started to move there production to an even better location!


Mexico!!!!

 

[Never Compromised]

As for the part about Chinese cars....there was a company that offered low low priced cars in Canada in the last 20 years....

The cars were junk and they left the market


LADA....a fine Russian vehicle!!

You get what you pay for!

And the Koreans did what with their cars?

 

[chazz_matzz]

They improved

And the Koreans did what with their cars?

The koreans used to make some awwful cars

Anyone remember the PONY?

However their cars are much much better!

I would rather own a Hyundai rather than and GM, Chrysler or Ford product

 

[dickydoem]

The Chinese are already moving into the North American automobile market with at least one car. Chery has a distribution agreement in place with Chrysler.

http://www.cheryglobal.com/

 

[chazz_matzz]

Great link

They are ugly but I am sure that like everything else coming from China they will be very inexpensive

 

[hoser1970]

Lets only look at the economy in Ontario, not the Canadian economy.

How rosy is the picture now??

Is the economy stagnant or has it seen negative growth yet?

Did you only read the first line of my post?

You have completely taken my comment about Western Canada completly out of context!

 

[FOOTSNIFFER]

I can't wait until they arrive...

The Chinese are already moving into the North American automobile market with at least one car. Chery has a distribution agreement in place with Chrysler.

http://www.cheryglobal.com/

Does anybody on this board understand that liberal trade benefits the consumer, not the producer??

If they do manage to sell cars for, let's say $ 8,000.00, then that liberates
4-5,000.00 per consumer/per car to be spent on other businesses, who then will need to hire staff. And how exactly do you think China is driving the prosperity out West except by the wealth they earn by their exports to us?

So let's look at the net benefits:
Same transport from point A to point B, for that segment of the market that wants just basic transportation
+ 4-5K for other priorities, money which otherwise would have had to be spent on a car. The expenditure of this money WILL create jobs that wouldn't have been possible
+ Chinese demand for our resources (potash in sask. for fertilizers for the growing of feedstocks for beef/poultry production that chinese are increasingly prefering to their traditional diet, for example)....leading to jobs out west.
- (possible) reduction in auto plants currently making entry-level vehicles....but this could be offset by people using their savings to purchase higher-margin cars, and the increased demand for higher-end cars from the people who have jobs thanks to the boost in real incomes made possible by the cheap chinese imports.

WIN, WIN, WIN. Free trade is a winner all the way. Economists agree on almost nothing, but they do agree on this point. Too bad conservative politicians don't make the case for free trade continuously.....but I guess they're just Liberal Lites now.

 

[fuji]

China, India, etc., are not the problem. As the poster above said the benefits from trade outweigh the costs. Yes it will cause some readjustment during which time some people will have to make a career change, but it'll create more jobs than it destroys, better ones, but different.

On the other hand Canada is developing "dutch disease", which is where the discovery and exploitation of oil destroys the rest of the economy. Inflation is actually running at 5-6% in Alberta and while the BoC raising rates will eventually get that under control it'll do a lot of damage to the rest of the country (ie: here) in the process. Resource prices tend to be highly volatile, and when the currency and interest rates are dominated by that it becomes VERY hard for other industries to plan for the future, neither currency nor financing is stable or predictable. So non-resource businesses wind up being at a competitive disadvantage to other countries with stable currency and stable financing.

The other thing is that globally we are obviously at the peak of the business cycle. Overall, full employment, low rates, and inflation rearing its head in many nations at once. We could coast here for awhile, or we could start to slide down, but the business cycle hasn't been repealed and we are so obviously at a classic "peak" in the cycle. After the peak comes...

 

[Meister]

I agree with most of the free trade benefits arguments. However, one thing to remember is that selling resources, while highly profitable, does not foster a highly skilled work force as it is basically just digging and refining dirt. Compare that to designing and engineering highly complex machinery as found in cars, mold and die work...
So, most people will continue to have jobs, just not the high paying ones.

 

[Keebler Elf]

WIN, WIN, WIN. Free trade is a winner all the way. Economists agree on almost nothing, but they do agree on this point.

The problem is that a lot of the Asian countries don't want free trade when it comes to autos. They want us to make cars there and they want us to import their cars but they won't let us export to them. At least, not without prohibitive tariffs.

I think this thread is going WAY off on a tangent...

 

[FOOTSNIFFER]

I agree with most of the free trade benefits arguments. However, one thing to remember is that selling resources, while highly profitable, does not foster a highly skilled work force as it is basically just digging and refining dirt. Compare that to designing and engineering highly complex machinery as found in cars, mold and die work...
So, most people will continue to have jobs, just not the high paying ones.

The recent conference board report on Canada's economy made the same point, and I totally agree with you. By the way, resource extraction actually is pretty capital intensive, so it's a highly paid occupation. The problem is that there aren't enough of these jobs to go around.

For a more readable, entertaining book on this topic, I'd highly recommend you check out 'Why Mexicans don't drink Molsons' by andrea mandel-campbell. Basically, the author lays the blame for our dearth of the jobs you mention at how we canadians approach challenges; we run away from them. I shudder to think what's going to happen to canada after the commodity boom ends (and they always do end).