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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{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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