Winnipeg Free Press

Winnipeg Free Press (Newspaper) - December 30, 2008, Winnipeg, Manitoba m y k Page b4 business editor Steve Pona 697 7264 business free press. My. i Market details b7 i Winnipeg repress. Com tuesday december 30, 2008 b 4 o Ottawa As bad As the past few months were even the Rosie st of economic forecasts shows on average canadians will get poorer in 2009, and Many perhaps As Many As 200,000 additional workers will lose their jobs As the recession deepens. The economic tsunami that was Well below the surface As 2008 began hit Canadas shores with a crash in the fall and is Only now washing deeper inshore swallowing an Economy that once appeared impregnable having withstood both the asian financial crisis a decade ago and the 9 11 fallout in the United states. Prime minister Stephen Harper described it Best in a recent television interview in which he perhaps tellingly did not reject out of hand the possibility of a depression a deep economic downturn in which output shrinks by 10 per cent or More. Ive never seen such uncertainty. Ism very worried about the Canadian Economy he said before explaining that governments had Learned survival lessons from the 1930s depression that they Are applying to the current situation. But As Merrill lynches Canadian chief economist David Wolf put it Given the events of the past few months How can you Rule anything out even us bears have been surprised at just How aggressively things have unravelled. A key lesson of the great depression and a reason economists believe the damage can be contained shy of d terrain is that governments must not sit idly by As the cancer spreads. The u. S., Europe China and others have already stepped to the plate with ruthian stimulus packages Worth trillions of dollars in total and Harper has suggested spending measures in the $ 20 billion Range Are being prepared for the Jan. 27 budget at a Price of a huge deficit. As Well Ottawa and Ontario announced recently that $ 4 billion will go into jump starting the battered Auto sector with More Likely to come As part of a North american Industry restructuring. The measures Arentt necessarily going to be popular although they Are Likely a minimum condition for preventing a Liberal nip coalition with the backing of the bloc Qutb Cois from seeking to dump the government once parliament resumes in late january. A Canadian press Harris Decima poll conducted in mid month found Only 39 per cent support for stimulus spending if it Means Ottawa will go into deficit. For policy makers the deficit ship has Long since sailed. Even sober minded economists dont see much to shout about in keeping government books in the Black if it Means the rest of the country sinks. If everyone else is too scared to spend their last dime governments had better they reason. Unfortunately its necessary. Things could be very ugly if policy makers dont step in to support the Economy in certain cases specific industries Bank of Montreal Deputy chief economist Douglas Porter said. It still going to be the weakest year since 91, agreed Dale Orr managing director of is global insight. The second half will be better than the first thank goodness but Well need another year after that before were Back to the Economy returning to potential. Orris analysis is shared almost universally among private sector economists who have been busily revising even their bleakest forecasts. Earlier this month the Bank of Nova Scotia set the Standard for Low with a projection that the Economy would shrink 1.2 per cent in 2009. A Day later the Bank of Montreal did it one notch better at minus 1.3 per cent. The shocker is that most expect a Seldom considered statistic called nominal Gross Domestic product which measures the value of what the country produces to become headline news next year As the wealth effect of High commodity prices Over the last six years gets reversed big time with Oil in the tank and prices of minerals grains Coal and other commodities also in decline. Many Are expecting nominal Gap to shrink by As much As three per cent in 2009, bringing lower corporate profits lower government revenues and most importantly lower wages. Thatus a shrinking of the economic pie the likes of which we really a vent seen for generations Wolf said. The Canadian press w Winnipeg mall managers and retailers monday reported Strong Christmas season sales although Many store owners admitted to offering deep discounts to lure customers to their shops. While its too Early to know what effect the discounts will have on retail profits one thing is Clear local shoppers were the winners. Sales of 50 to 80 per cent were common As National retail chains reacting largely to bad economic news in Ontario offered the same savings across Canada including Winnipeg. Retailers at Kildonan place shopping Centre agreed that discounts and traffic were up this year. Christmas and boxing Day traffic was higher than Normal Graham Dagg manager of clothing retailer Randy River said. People were Selling stuff a lot cheaper this year than previous years. Dagg said his store was offering the same sales monday As it had on boxing Day up to 80 per cent off. Definitely its More of a Cut than last year. Dagg also noted that customers were buying cheaper goods As opposed to More expensive items such As jackets. National and local retail sales figures wont be available until mid to late january. Kayla Fillion acting manager at the naturalized shoe store said her store also offered huge sales this year to attract customers. Usually we just have a percentage on boxing Day like 25 per cent off everything but this year we had up to 50 per cent off and an extra 25 per cent off clearance shoes she said. Fillion said there was steady traffic at her store throughout the Christmas season and sales numbers reflect that. October november and december weave been Well Over budget Gross sales targets 30 to 40 per cent Over she said. Kildonan place manager Peter havens said mall traffic was not High in the first two weeks of december but then it took off. He speculated that people were holding onto their Money until better deals were offered. Havens was pleased about the number of mall tenants who offered great deals but acknowledged that May Cut into retailers profits. He said he believes big discounts by National retailers Are a response to economic uncertainty and that Winni Eggers were the winners. I think its a response to the National economic feeling. Fortunately Here in Winnipeg we dont seem to have the same economic crisis thatus going on in the rest of Canada but because a lot of the stores and tenants Here Are National chains what they decide for one area of the country for instance Ontario or b. C., has to apply to All their stores he said. I think our Consumers in Manitoba and certainly Winnipeg Consumers have really benefited by that. We have a relatively stable local Economy and yet were experiencing these deep discounts these stores Are taking earlier in the season. Local retailers were reluctant to predict what business will be like in the new year but Industry forecasts have been downright gloomy. My own View is that the first few months of 09 Are going to be really quiet David Ian Gray president of Vancouver based dig360 consulting ltd., said. In the u. S., the news has been grim for months and a rash of store closings is predicted Early in the new year. The most dramatic pullback in u. Consumer spending in decades could transform the retail landscape As thousands of stores and whole malls close Down analysts say. With files from can West news service and the associated press deep discounts entice shoppers traffic has soared but profits May Sag by Sean Ledwich bad does not begin to describe it up to 200,000 More Canadian jobs could be axed As Economy sinks by Julian Beltrame Ruth Bonneville / Winnipeg free press business Randy River manager Graham Dagg says his outlet has been hopping during the Post Christmas Blitz. Ruth Bonneville / Winnipeg free press naturalized manager Kayla Fillion said her store in Kildonan place offered huge sales to attract customers and it worked. 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