Consumer confidence could buoy N.L., research company CEO says

Everton McLean
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Economy

Newfoundlanders and Labradorians may be the most likely to spend money in the western world, says the president and CEO of Corporate Research Associates.

Don Mills spoke on the state of the country and province during the St. John's Board of Trade Business Development Summit held Thursday.

Don Mills, the CEO and president of research firm Corporate Research Associates Inc., speaks at the St. John's Board of Trade Business Development Conference Thursday. He said Newfoundlanders and Labradorians continue to show high spending confidence, des

Newfoundlanders and Labradorians may be the most likely to spend money in the western world, says the president and CEO of Corporate Research Associates.

Don Mills spoke on the state of the country and province during the St. John's Board of Trade Business Development Summit held Thursday.

He said that, as of November, people in this province had the highest consumer confidence of anyone in the country and nearby countries.

"It's extraordinarily high at the moment. In fact, it may be the highest in the western world," he said.

"Most other jurisdictions are in negative consumer confidence territory."

He said consumers represent about two-thirds of the gross domestic product in any province, so confidence in spending, especially on items such as automobiles and houses, could help the province face the fallout of the global economic crisis.

Mills said job security is a big factor in that confidence, and the fact many workers have left seasonal positions to find non-seasonal work in urban centres in the province has bolstered that security.

"When people aren't worried about their jobs, they spend money. When they aren't sure of their jobs, they stop spending money because they have to prepare for the possibility of not having a job," he said.

Mills acknowledged the surveys that show such a response are from November, before slowdowns in Labrador City and the shutdown of the AbitibiBowater mill in Grand Fall-Windsor were reported, but he still feels the province has a positive outlook overall.

As well, he said, there's no doubt loss of jobs in Alberta could temper the economy here, but compared to other provinces Newfoundland and Labrador has not seen as many significant layoffs.

"If there's a lot of people coming back from Alberta looking for jobs, that could make a difference, but it would have to be a lot of people," he said.

Mills also talked about politics in this province, where, he said, Premier Danny Williams has set a new "high water mark" for popularity during his tenure.

He said Williams' approval ratings over the past couple of years have been the highest ever seen in Canada.

And while generally complimentary of Williams' administration, Mills said the Anything But Conservative (ABC) campaign during last fall's federal election was a mistake that the province could pay for soon.

"Don't think Mr. Williams, with the Conservatives, will not pay a price."

He said it will be interesting to see whether Prime Minister Stephen Harper punishes Newfoundland and Labrador for shutting Conservative candidates out by giving the province only a small share of the expected stimulus package in the budget next week.

"If there's any sense Newfoundland is not getting its share of that stimulus package, that may be a sign" that the federal-provincial relationship could continue to be sour, he said.

With regard to the other highly questioned action taken by Williams in the past year - the expropriation of hydro and timber rights from AbitibiBowater - Mills said he's not sure that was a mistake.

Good political move

In fact, it could have been a good political move, he said.

"It is unprecedented and, yeah, there could be a legal fight over it, but I'm not convinced yet that that's not a smart political move. ... Don't forget, he is playing to the people of Newfoundland and Labrador. He's not playing to the Canadian people, he's not playing to the owners of Abitibi."

Regardless of the outcome of the economic turmoil, the ABC campaign or the AbitibiBowater dispute, Mills said, the other major challenge facing the province will be providing health care at a reasonable cost.

"When we see health-care (spending) going up by double digits every year, we know we have a significant problem," he said.

"We have to find a new way to deal with health care."

He said privately levered, publicly funded health care, where the services are contracted out at a locked-in cost, could be a solution.

That kind of system allows for better budgeting and more efficiency, he said.

emclean@thetelegram.com

Organizations: AbitibiBowater, Corporate Research Associates, St. John's Board of Trade Business Development Summit Conservatives

Geographic location: Newfoundland and Labrador, Don Mills, Alberta Windsor Canada Abitibi

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Recent comments

  • Doug
    July 02, 2010 - 13:21

    In the past two days, there have been about five different articles in The Telegram expressing entirely opposing viewpoints about how Newfoundland's economy will fare in the coming year. One minute we're facing a disaster, the next minute we should be okay, and a few hours later we're going to lead the western world in spending. I guess what all these experts are trying to tell us is that well, we might be okay OR we might not OR we'll probably be better off than everyone else OR then again maybe not OR ... Can we start getting some news and facts rather than rumours and theories for a change?

  • Mark
    July 02, 2010 - 13:13

    Just out of curiosity - what constitutes a good political move ?

  • Doug
    July 01, 2010 - 20:04

    In the past two days, there have been about five different articles in The Telegram expressing entirely opposing viewpoints about how Newfoundland's economy will fare in the coming year. One minute we're facing a disaster, the next minute we should be okay, and a few hours later we're going to lead the western world in spending. I guess what all these experts are trying to tell us is that well, we might be okay OR we might not OR we'll probably be better off than everyone else OR then again maybe not OR ... Can we start getting some news and facts rather than rumours and theories for a change?

  • Mark
    July 01, 2010 - 19:52

    Just out of curiosity - what constitutes a good political move ?