Page & The Herald, Wednesday, December 20, 1978

Forecast dim

OTTAWA (CP) — The new
chief economist of the
Conference Board in Canada
made his public debut
Tuesday predicting the new
year will bring worse
unemployment, continued
inflation and helow-potentlal
economic growth.

Thomas Maxwell, 46,
named three weeks ago as
the board's economic
spokesman, said 1979 offers
consumers few prospects for
improvement.

Issuing the board’s latest
quarterly economic forecast,
he said the private research
organization estimates the
economy will grow by 3.3 per
cent this year and 3.4 per
cent in 1979.

In its September forecast
the board was calling for
four-percent growth by the
end of this year.

A spokesman said a dis-
appointing third-quarter
showing, characterized by a
trade performance far below
the board's expectations
had forced it to revise its
annual growth forecast down
radically.

The board predicted an .8-

per-cent unemployment rate
next year and a 7.8-per-cent
increase in the cost of living.
_ This is an improvement
from the nine-per-cent in-
flation expected by the end of
this year, but a worsening of
the unemployment rate
which now is 8.3 per cent,

The federal goyernment’s
forecast for 1979 of three-to-
four-per-cent growth is inthe
game range as the hoard’s
latest predictions,

Maxwell said the economy
will undergo a shift next
year. For the last few years,

‘Canada has depended for

most of its growth on the
strength of its exports to the
With a slowdown an-
ticipated in the U.S. next
year, almost all economic
growth must come from
within in 1979, he said.

The board expects the onl
significant sources of grow
next year to be consumer
spending and business in-
vestment in machinery and
equipment,

It says the measures
designed to get the economy
moving in the November

Naval contract
up for bidding

OTTAWA (CP) — Five
shipbuilding groups have
submitted proposals | to
design and build six naval
frigates for $1.5 billion, the
largest single naval contract
in Canadian history.

The government frigate
project team announced
Tuesday the contractors
offering to build the ships are
CANTEC Marine, a group
including Litton Systems
(Canada) Ltd. of Rexdale,
Ont.: Davie Shipbuilding of
Lauzon, Quem and Cantieri
Navali Riuniti of Genoa,
Italy; Genstar Marine of
North Vancouver; Pratt and
‘Whitney Aircraft of Canada
Ltd. of Longueuil, Que.; and
Sperry Systems
Management of Ottawa.

Rene Richard, a supply
department representative
on the government project
team, said no further details
could be released as the bids
had just arrived, :

He could not evensay who
the sub-contractors ‘were in
the bids as the boxes con-
taining the documents were
just being opened. The
bidders delivered documents
weighing a total of three tons
to the project team office.

Commodore Thomas
Arnott, project team head,
said the government will
take several months to wade
through the documents and.
prepare for the next stage in
the competition.

The government would
narrow down the list to two

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consortia by late spring next
year for the. next stage.

The remaining contenders
will then provide detailed de-
signs and cost estimates.
The project team will make
its recommendation to
cabinet by 1981 and cabinet
will decide whether to pick a
winner and build the ships.

The first vessel is to be
delivered by 1995 and the last
by 1889.

The competing ship-
building groups were given
almost three extra weeks to
submit these proposals, but
Arnott said he expects the
naval frigates will be
delivered on time.

“We gave the industry a
real challenge and as they
delved into the request for
proposals it was obvious they
needed a little more time to
obtain a better response and
realign themselves with sub-
contractora and other
partners,” Arnott said.

Bill Armstrong, an in-
dustry department
representative on the praject
team, said the team expects
at least 50 per cent of the
contract cost to be offset by
benefits for Canadian in-
dustry. He hoped it would be
considerably more than 50
per cent.

The cabinet would prefer
the ships to be assembled in
Canada and that alone would
account for 50 per cent, he
said. However, the project
team also was looking for
other benefits.

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federal budget will be

capable of offsetting, only in -

part, the sluggishness
resulling from the spending
restraint program an-
nounced by Prime Minister
Trudeau last summer.

Maxwell said the crucial
factor In the economic
outlook for the 1980s is the
pattern of wage settlements
next year, If a few major
unions, such as the railway
workers, demand what he
called “unwarranted in-
creases,” it could jeopardize
the country’s chances for
economic recovery.

The board expects wage
demands to accelerate
steadily in 1979, averaging
&7 per cent by year-end
compared with this year’s
6.2 per cent.

It is natural workers will
demand more generous
wage increases once the
federal income control
program expires merely to
maintain their living stand-
ard as inflation eats’ away at
their earnings, said Max-
well,

But he urged them not to
try to recoup the loss of
earning power they have
suffered since the govern-
ment imposed controls in
1975,

The economy could stand a
“subdued catch-up” in
wages, but an explosion in
wage demands would have
disastrous consequences,
setting in motion a new cycle
of rising prices and wages.
similar to the one which
prompted the government to
impose controls.

Other highlights of the
forecast:

—The dollar will have a
value between 84 and 87
cents compared with its U.S.
counterpart for the next 12
months,

—Growth next year will be
considerably better than the
2.0 per cent the board is
predicting for the U.S.

—Housing will be one of
the weakest sectors of the
economy with a modest
920,000 housing starts
predicted.

—Government spending,
in line with the restrictive
stance taken last summer,
will increase by just 2.2 per
cent.

—The country's mer-
chandise surplus will reach
$4.2 billion in 1979, but this
will be more than offset by
an estimated $4.7-billion
deficit in Canada’s trade in
services, such as foreign
travel and interest and
dividend payments abroad.

—Corporate profits will in-
crease by 11.9 per cent next
year compared with 13.3 per
cent in 1978.

The forecast was com-
pleted before the
Organization of Petroleum
Exporting Countries
(OPEC) made their weekend
announcement that inter-
national oil prices will in-
crease by 14.5 per cent in
1979. :

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heading the list, said Dr.

{T'S
GOOD
FOR
YOU

OTTAWA (CP)Dolng
housework may be good
for your health, a recent
medical study shows.

In the study, conducted
by Dr. Charles Freer of
the University of Western
Ontario in London, 26
randomly selected
women were required to
keep a four-week daily
diary including everyth
ng from the weather and
their relationships with
others to minor illnesses

and how they coped with

blems.
The daily logs showed
the women chose

housework and shopping
most often to help them
feel better when they
were alone, said Dr,
Martin Bass who
supervised the study.
Other activities chosen
less frequently were
personal hygiene, reading
a book, using alcohol and
having a cup of coffee or
tea

However, 21 women
used nonprescription
drugs one or more times
during the period between
March and April with
pain-relievers and cough
and cold remedies

Bass in a recent in-

terview.
The use of psychotropic
drugs, such as

tranquilizers, was at the
bottom of the list.

Dr. Bass said the study
was an attempt to learn
how persons manage self-
eare when they are alone.
The women had been
selected from among
those visiting — the
university hospital.

“With the study, Dr.
Freer is not saying that
doctors should start

prescribing patients
housework and telling

them to handle their own
problems,” said Dr. Bass.

“It means you don't
have to take an aspirin if
something is wrong.”

Canadian firm would close here

WINNIPEG (CP) — K-Tel
International Ltd, a Win-
nipegbased firm engaged in
worldwide merchandising, is
having problems with its
operations in Canada. ;

President Phillip Kives
says some modest changes
are planned next month. Ef
they do not work, there may

' bea major reorganization by

June.
“Canada is the first place

that I would close up if I did

not live here," he says.
“The Canadian economy is

not good, business is un-

certain, and we need a.

government to get things
rolling. In. addition,
productivity Is much less
than in the United States,
and whila some people may
have.more money, they. are
not spending it.”’

Canada is not the only

trouble spot for K-Tel, which
sells records, household
gadgets and other products
in 21 countries,

Kives says the company
has already withdrawn from
Argentina, and it is con-
sidering an early end to
operations “in France
because the French gov-
ernment does not allow the
advertising of records on
television.

Over-all, however, the
company is doing well. K-Tel
had a profit of $564,000 on
sales of $125.6 million in the
fiscal year that ended last
June 30, That compared with
a $653,000-loss and sales of
$103.7 million a year earlier.

In the quarter -ended Sepl.
30, sales were $29.5 million,
up 56 per cent from $18.9
million in the same quarter
last year.

Christmas.

To avoid the rush on

Christmas Day, why not place

your Long Distance Calls on
aturday or Sunday.

Regular discounts are available December 23rd and 24th,
so call up when rates are down.
Direct dialling (112) is usually the cheapest way to place

your calls.

If you don’t know the distant number, you can get it by

calling Long Distance Directory Assistance. But please do so a few:

days in advance to avoid the rush.
For information on discount periods, area codes and Long
Distance Directory Assistance, please check your directory.

BCTEL®

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