UK Business Activity Expands for Fifth Month in Sign of Recovery

(Bloomberg) — Britain’s private sector firms continued to report output growth, adding to evidence that a rebound from last year’s recession is underway.

S&P Global said its composite purchasing managers’ index registered 52.9 in March, a marginal decline from 53 in February. It was lower than the reading expected by economists but above the crucial threshold of 50 signaling growth for a fifth month.

The figures are the latest indication that the UK economy is growing moderately again after a mild recession last year. But they also indicated persistent inflationary pressures that the Bank of England is seeking to curtail, holding interest rates at a 16-year high.

“A further robust expansion of business activity ended the economy’s best quarter since the second quarter of last year,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a report Thursday. The PMI reading suggests UK GDP is on track for a 0.25% rise in the first quarter, he added.

What Bloomberg Economics Says …

“The British recession is over. That’s the takeaway from the latest composite PMI survey despite a slight retreat in March. Still, the tiny dip in the composite PMI is a reminder that the outlook remains fragile. We expect growth to remain subdued in 2024.”

—Niraj Shah, Bloomberg Economics. Click for the REACT.

Economists and investors expect the BOE to keep the key rate at 5.25% when the latest decision is announced at 12 p.m. in London. The PMIs were little changed from a month ago, suggesting the economy is evolving about the way the central bank forecast last month.

S&P said manufacturing output rose slightly for the first time since February 2023. The expansion in services activity softened due to lower demand from households feeling the squeeze from the cost-of-living crisis.

While services providers posted a drop in confidence, optimism in the manufacturing sector hit the highest since April 2023. Businesses are expecting higher sales over the year thanks to citied improving consumer confidence, easing inflation and the prospect of rate cuts in 2024.

Inflation remains a concern for businesses reporting spiking input costs. Higher wage pressures impacted the services sector, while manufacturing businesses faced increases in freight costs and commodity prices.

“Stubbornly sticky service sector inflation has persisted into March, exacerbated by renewed inflation in the manufacturing sector,” Williamson said. “March’s PMI warns of elevated underlying price pressures which will likely add to calls

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What defines an Indigenous business? A guide aims to weed out fronts and frauds

A coalition of Indigenous economic organizations wants the federal government to adopt new definitions of what constitutes Indigenous businesses and organizations into its procurement process.

“We know that there are shell companies that maybe have an Indigenous front person that’s being used really to access a lot of set-asides and procurement opportunities,” said Dawn Madahbee Leach, chair of the National Indigenous Economic Development Board and a member of the National Indigenous Procurement Working Group.

The new Indigenous Business Definitions were released by the National Aboriginal Capital Corporations Association (NACCA) last week and developed by the National Indigenous Procurement Working Group, which consists of representatives of various Indigenous organizations, government departments, and industry associations.

In 2021, the federal government announced a government-wide procurement target of five per cent for Indigenous businesses. The federal government’s Indigenous Business Directory includes a list of Indigenous companies eligible for special consideration when bidding on some federal contracts.

The new guide provides criteria for Indigenous sole proprietorships, corporations, non-profits, charitable organizations, co-operatives, and partnerships.

Dawn Madahbee Leach is chair of the National Indigenous Economic Development Board and a member of the National Indigenous Procurement Working Group. (Submitted by Dawn Madahbee Leach)

Some of the criteria are similar to what is used by the federal government, such as requiring 51 per cent ownership and control by Indigenous people, while other definitions are tougher, said Madahbee Leach.

She hopes the definitions will help weed out businesses that aren’t Indigenous-led, false claims of Indigeneity and tokenism from opportunities meant for First Nations, Métis and Inuit.

“It’s going to make a difference to ensure that those set-asides that are meant for our people go to our people,” said Madahbee Leach.

“There’s so much opportunities to involve our people in Canada’s economy and procurement is one of the best ways.”

NACCA’s criteria for proof of Indigeneity excludes membership in some organizations the federal government’s Indigenous Business Directory criteria includes.

“We’ve contested that directory and we said we need to maintain it because we know how to determine Indigeneity way better than, you know, a civil servant,” said Madahbee Leach.

Controls versus barriers

The Canadian Council for Aboriginal Business, which was part of the working group that developed the definitions, said it has concerns about the criteria around joint ventures and partnerships, and that the definitions require further work.

The guide’s criteria include agreements that define the Indigenous partner as “having the

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Retailers are cutting prices to win your business. Here’s where you can save – National

Canadians with extra spending cash right now might find they can score deals on clothing, some discretionary items and higher-ticket purchases as experts say retailers are fighting harder for consumers’ dollars.

February’s inflation report released Tuesday shows that not only is the pace of price hikes cooling across a range of household expenses, but some products are even seeing costs decline year over year, offering consumers much-needed relief in some categories.

The clothing and footwear component of Statistics Canada’s consumer price index saw a 4.2 per cent decline year over year last month, steeper than the 1.3 per cent drop seen in January. The section including household furnishings also saw annual price declines accelerate in February.


Click to play video: 'Canada’s inflation rate slowed to 2.8% in February, beating expectations for 2nd consecutive month'


Canada’s inflation rate slowed to 2.8% in February, beating expectations for 2nd consecutive month


Shelly Kaushik, economist with BMO, said in a note to clients on Wednesday that “it’s clear prices for discretionary goods are falling” in Canada.

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She highlighted that jewelry prices saw the biggest drop on record in non-seasonally adjusted terms last month. While she noted that an increase in the supply of lab-grown diamonds or alternative stones could have driven prices lower for sweethearts shopping over Valentine’s Day, the simpler explanation is that the Bank of Canada’s interest rate hikes are working well to tamp down price pressures in this area.

“Consumers are pulling back on non-essential items amid elevated rates, pushing the prices of those items down. Monetary policy in action,” she said.

Retail analyst Bruce Winder tells Global News the softening economy is indeed hampering consumer spending demand, which is forcing many retailers to drop prices to make sales.

“There is discounting that’s happening right now, because retail is all about supply and demand,” he says.

Discretionary items like jewelry and clothing and higher-ticket durable goods like electronics, furniture and appliances are “softer right now” because higher interest rates are forcing households to spend more on shelter costs, Winder says.

While food inflation cooled significantly in February, the cumulative impact of price hikes over the past few years means grocery bills are still eating up a big chunk of Canadians’ budgets, he adds.

“It’s still expensive out there. So consumers have had to make trade-offs,” he says.

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And retailers are taking notice of their cash-strapped customers.


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Windsor business delinquencies rising faster than national rate

Published Mar 21, 2024  •  Last updated 6 hours ago  •  3 minute read

Windsor-Essex businesses have been particularly hard-hit by the pandemic and its aftermath. A shuttered business on Ouellette Avenue in Windsor is shown on Tuesday, March 19, 2024. Photo by Dan Janisse /Windsor Star

Despite optimism seen on the near-horizon, Windsor area businesses appear to have been hit harder, on average, than elsewhere in Ontario or Canada, according to new figures.

An Equifax Canada Market Pulse Quarterly Business Trends report released this week shows business delinquencies on credit/loan payments rose at a faster rate in Windsor-Essex than the national and provincial averages in 2023.

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“I didn’t expect us to be higher than the Canadian average,” said Windsor-Essex Regional Chamber of Commerce CEO Rakesh Naidu.

“It’s a sign businesses are struggling.

“This has been a period of pain longer than

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American Eagle (AEO) earnings Q4 2023

American Eagle on Thursday announced a new strategy to boost profitable growth over the next three years, as the retailer said it wrote off $94 million in impairment charges related to its internal logistics business Quiet Platform.

The company also reported holiday earnings that beat Wall Street’s expectations thanks to strong demand and lower markdowns and input costs. 

Shares closed 2% lower Thursday.

Here’s how American Eagle did in its fourth fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: 61 cents adjusted vs. 50 cents expected
  • Revenue: $1.68 billion vs. $1.67 billion expected

The company’s reported net income for the three-month period that ended Feb. 3 was $6.32 million, or 3 cents per share, compared with $54.6 million, or 28 cents per share, a year earlier. Excluding one-time items, American Eagle posted adjusted earnings of 61 cents per share. 

Sales rose to $1.68 billion, up about 12% from $1.5 billion a year earlier. 

In the current quarter, American Eagle expects sales to be up by a mid-single digit percentage, which is in line with estimates of up 5%, according to LSEG. For the full year, it expects sales to be up 2% to 4%, the higher end of which would beat the 2.9% analysts had expected, according to LSEG. 

During the Covid pandemic, American Eagle spent hundreds of millions of dollars acquiring a number of shipping and distribution companies that eventually became Quiet Platforms, the retailer’s internal logistics branch. It was designed to streamline American Eagle’s own shipping needs, but the company also sought to “Uber-ize” the global supply chain by serving as a logistics platform for other companies. 

Last spring, American Eagle acknowledged that Quiet Platforms wasn’t performing as it had expected. The segment’s president and chief operating officer had left the company as the retailer worked to restructure the business, RetailDive reported.

During the fourth quarter, American Eagle took $98.3 million in impairment and restructuring charges related to Quiet Platforms, the bulk of which were impairments to its goodwill, intangible assets and technology that are no longer a part of the platform’s long-term strategy. Employee severance costs made up $4.3 million in charges.

While the investments may no longer be worth what they once were at the time the company made them, finance chief Mike Mathias told CNBC the platform has

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