Queen's University

School of Business experts predict economy will continue to see low interest rates paired with low consumer confidence

 
2011-12-12

Be cautions and continue to prepare for the unexpected – that’s the advice from members of the Business Forecast Lunch, which was recently hosted by the Queen's School of Business.

A group of business professors – Lynnette Purda, Barry Cross and Ken Wong – and fourth-year student Danny Hertz made their predictions to a luncheon that attracted business leaders from across the Kingston community.

Overall, the panel predicted that uncertainties in the Euro zone and slowing growth from emerging markets will drive both business and personal spending decisions in 2012. While businesses have shown recent signs of stronger corporate profits in the third quarter of 2011, they remain hesitant to invest in large scale growth opportunities while uncertainty remains high. Smaller corporate investments combined with lower levels of government spending will result in small gains for Canada’s economy next year, the panel predicted.

“Despite another year of volatility and tremendous uncertainty due to global events, such as the Japanese Tsunami, European sovereign debt crisis and the US credit downgrade, 2011 has not been a bad one for Canada,” said Dr. Purda, a finance Professor and Business Forecast Lunch moderator.

Locally, a survey of Kingston businesses and consumers revealed conflicting levels of optimism regarding the local economy.

“Relative to the rest of Canada, the recession was relatively kind to Kingston. This can primarily be attributed to its public sector base,” said Professor Wong, noting the many government jobs in Kingston such as Corrections Canada and CFB Kingston.

The trade off, Professor Wong says, is that public-sector based economies tend to remain stable during recovery periods and, as a result, Kingston’s overall economy did not rank as highly as other Canadian municipalities.

The Business Forecast Lunch was founded 30 years ago by Queen's School of Business professor emeritus Merv Daub to establish an important link between the business school and the Kingston business community.
 

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