These are stories Report on Business is following Tuesday, Oct. 23, 2012.
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Where the money is
Jobs in the tech sector will command the highest pay increases next year, according to a new survey of salary trends, but it won?t be too shabby for office dwellers either.
The study released today by Robert Half International projects starting salaries in the tech industry will climb by 4.5 per cent.
?Mobile applications developers will see the highest increases (an average of 9 per cent), as companies look for people to help them build business using mobile media,? the company said in a statement.
?Network engineers, business intelligence analysts, and senior IT auditors also are in demand.?
Base pay for administrative and office support staff should rise by 3.9 per cent, and among accountants and finance professionals 2.2 per cent.
?Employers are refilling some roles and creating new ones to ready themselves for future growth. Positions in demand include executive assistants and customer service representatives. Above-average salary increases also are projected for select administrative positions in the health care industry and in human resources.?
In the finance field, there?s a notable need for analysts and senior accountants, Robert Half said.
?In the health care industry, financial professionals with knowledge of health informatics and those who maintain and provide financial data, are being hired to handle initiatives related to the collection of electronic medical information. In financial services, there is demand for risk and compliance professionals who can interpret evolving regulatory requirements.?
Bank of Canada still outlier
Bank of Canada Governor Mark Carney and his colleagues remain an outlier among major central banks, still maintaining today that the next move in interest rates will likely be up.
The central bank held its benchmark overnight rate steady at 1 per cent, but many observers had expected Mr. Carney to pull back from the message he has been sending on higher rates in time.
He didn't do that, as The Globe and Mail's Kevin Carmichael reports. The central bank said that "over time, some modest withdrawal of monetary policy stimulus will likely be required," which means it sees the benchmark rate rising, though gradually and modestly, at some point.
But there's a new twist today, one that suggests Mr. Carney may at some point use rate hikes to try to hold down the record debt levels among Canadian consumers.
"The timing and degree of any such withdrawal will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector," the Bank of Canada said, which should serve as a warning.
"That?s a new dimension, and hints that if household debt growth fails to slow, the bank might use rate hikes to tame it, even if the near term inflation outlook does not otherwise require such hikes," said chief economist Avery Shenfeld of CIBC World Markets.
The central bank also covered the waterfront where the global economy is concerned.
"The economic expansion in the United States is progressing at a gradual pace," its said.
"Europe is in recession and recent indicators point to a continued contraction. In China and other major emerging economies, growth has slowed somewhat more than expected, though there are signs of stabilization around current growth rates. Notwithstanding the slowdown in global economic activity, prices for oil and other commodities produced in Canada have, on average, increased in recent months. Global financial conditions have improved, supported by aggressive policy actions of major central banks, but sentiment remains fragile."
Global "headwinds" are holding Canada back, the central bank said, but developments inside its borders support "a moderate expansion" of the economy.
"Following the recent period of below-potential growth, the economy is expected to pick up and return to full capacity by the end of 2013. The bank continues to project that the expansion will be driven mainly by growth in consumption and business investment, reflecting very stimulative domestic financial conditions. Housing activity is expected to decline from historically high levels, while the household debt burden is expected to rise further before stabilizing by the end of the projection horizon. Canadian exports are projected to pick up gradually but remain below their pre-recession peak until the first half of 2014, reflecting weak foreign demand and ongoing competitiveness challenges. "
RBC strikes Ally deal
Royal Bank of Canada is buying Ally Financial Inc.?s Canadian auto finance and deposit business, for a net purchase price of $1.4-billion (U.S.), The Globe and Mail's Bertrand Marotte reports.
RBC said the business offers inventory financing to more than 580 car dealerships across the country. The consumer side offers retail financing to consumers through roughly 1,600 dealerships; it has about 450,000 consumer loans.
Canada in top ranks for small business
Canada ranks among the world?s top 20 countries for running small and medium-size businesses, a new study finds, and is No. 1 when it comes to getting through red tape to launch an operation.
The 10 annual study by the World Bank and International Finance Corp. ranks Canada at No. 17 in the overarching category of? ?ease of doing business.? The top five include Singapore, Hong Kong, New Zealand, New Zealand, the United States and Denmark.
?According to a recent review, evidence from several studies shows that reforms making it easier to start a formal business are associated with increases in the number of newly registered firms and sustained gains in economic performance, including improvements in employment and productivity,? the report says.
?For example, in both Canada and the United States empirical research finds that economic growth is driven by the entry of new formal businesses rather than by the growth of existing firms.?
Canada holds the No. 3 spot when it comes to the ease of starting a new business, and top spot in terms of having the fewest procedures necessary to do that.
Canada ranks No. 2 for making exporting easy, and No. 4 for investor protection.
?Each indicator set measures a different aspect of the business regulatory environment,? says the report.
?The rankings of an economy can vary, sometimes significantly, across indicator sets ? These correlations suggest that economies rarely score universally well or universally badly on the indicators ? Consider the example of Canada. It stands
at 17 in the aggregate ranking on the ease of doing business. Its ranking is 3 on starting a business, and 4 on both resolving insolvency and protecting investors. But its ranking is only 62 on enforcing contracts, 69 on dealing with construction permits and 152 on getting electricity.?
I?ll just point out, too, that Canada scores well in the category of ?making it easy to pay taxes,? at No. 8. I think we all know that goes well beyond small business.
Retail sales volumes dip
It?s not that Canadians are buying more. It?s that what they?re buying ? in terms of food and gas ? costs more.
Retail sales in Canada climbed 0.3 per cent in August, Statistics Canada said, but fell 0.3 per cent in volume terms when you remove the price effects.
?The largest increase in dollar terms among all subsectors was a 2.9-per-cent rise at gasoline stations, reflecting higher prices at the pump,? the federal agency said.
Markets troubled
Global stock markets are faltering so far this morning,? troubled by weak quarterly corporate reports and ongoing woes in Europe.
?Stocks are in the red across Europe this morning after rating agency Moody?s downgraded five Spanish regions. The credit rating for the Spanish government remains unchanged at one notch above junk status but this will still put pressure on the Madrid government, because the semi-autonomous regions will need to lean on Madrid even more,? said market analyst David Madden of IG in London.
Tokyo?s Nikkei was effectively flat, European markets are tumbling and New York appears head for a weaker open.
London?s FTSE 100, Germany?s DAX and the Paris CAC-40 were down by between 1.1 per cent and 1.4 per cent by about 7:30 a.m. ET.
Dow Jones industrial average and S&P 500 futures also slipped.
"Global equity markets are awash in red this morning and the [U.S. dollar] index is seeing some added strength following a move by Moody?s to downgrade five Spanish regions to below investment grade," said Carl Campus of BMO Nesbitt Burns.
"Commodities are mostly weaker with WTI crude -1.3 per cent to $87.55/barrel, gold -1.1 per cent to $1709/oz and copper -1.1 per cent. Natural gas futures are 0.5 per cent higher following yesterday?s steep plunge from 10-month highs."
Feeling the pinch
Nearly three-quarters of Canadian households would feel a significant strain if they were to experience a modest increase in their monthly mortgage payments, a new survey by Bank of Montreal suggests.
As The Globe and Mail?s Tara Perkins reports, the BMO report indicates Canadians still have strong buying intentions when it comes to housing, with 46 per cent of homeowners saying they intend to buy a property in the next five years. But the number who would buy in the next five years drops to 36 per cent if house prices were to rise by 5 per cent, showing the sensitivity of the market to prices at a time when many economists expect them to soften.
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