Archive for June 16, 2009

Will there be corporate resistance to smaller homes

Since World War II, the North American landscape has been remade to suit the automobile.  Urban spaces often languished (with notable exceptions) in favour of suburban spaces, spread out such that driving and automobile ownership became necessities.

A tremendous automotive-industry lobby contributed to this phenomenon.  Government built roads provided a massive subsidy to the motor vehicle industry.  Moreover, the automotive industry specifically lobbied against transit plans.

The “Fordist” model of human organization that prevailed also included growing numbers of Malls, Power Centres, and stand-alone big-box stores where suburban residents did their shopping (by car, SUV or mini-van).

Therefore, assuming this “Great Reset” is occurring, the shift toward more urban living, less automotive use, and living in smaller spaces is going to threaten the general profitability and size of a wide range of companies and industries.  Shopping without a car and living in a smaller home will likely mean buying less — unless it’s totally disposable, which generally goes against the ecological sensitivities that many people share today.

Will the large retailers and makers of products now widely consumed adapt (assuming this is possible) or fight the tide?

Toronto’s remarkable resiliency to the 2009 recession

If you exclude manufacturing employment, there were more jobs in Toronto in May 2008 than May 2009, according to the Labour Force Survey produced monthly by Statistics Canada.   Jobs in categories that include the financial sector and accounting continue to grow — albeit more slowly than during the boom times.

The last big recession, which occurred in 1991, hit Canada’s largest city of Toronto hard.  Not only did manufacturing employment decline, so did jobs in the financial sector as the nation adjusted to a variety of structural changes.  Unemployment rates exceeded 12% while the vacancy rate in office buildings reached 20% (7% is considered a normal “balanced” market).  So, the resiliency this time was not fully expected.

Although the media remains focused on the automotive manufacturing job losses, bailouts, and related challenges, it’s the other story that intrigues me.  What is helping to hold up employment in the other industries?

Various Toronto clusters seem to be holding up well.  The financial and accounting sector is being noticed globally and attracting some superstar talent (such as the repatriation of economist David Rosenberg from the defunct Merrill Lynch in USA) as well as the expansion of global operations for organizations like KPMG.

Anecdotally I’ve heard the pharmaceutical sector is doing well and exporting globally.

The jobs numbers that I’ve been looking at (unadjusted for seasonality, sorted by high-level NAICS and NOCs codes, for CMAs) don’t distinguish between part-time and full-time jobs, so it may be that some positions have shifted to part-time from full-time.  But this move would suggest that employers in Toronto are trying to hoard talent and retain their skilled workforces, another sign of a vote of confidence in Toronto.

But I live thousands of kilometers from Toronto — for those of you there, what are you hearing and seeing?  what industries are propping up Toronto’s economy?