Lecture: Economic Foresight and Insights by Peter Hall

Introduction by Jason Meyer

Welcomed participants and introduced Peter Hall, former economist for EDC, now running his own consulting firm.
Special thanks to Salesforce for sponsoring the webinar.
Emphasized Salesforce's role in modernizing commercial operations, reducing revenue leakage, transforming service experience, and bolstering channel partnerships.
Highlighted uncertainty in manufacturing due to COVID-19, Suez Canal incident, geopolitical tensions, and inflation.

Peter Hall's background: Former EDC economist, now a consultant.
Noted Peter's insights on global and Canadian economies are crucial for the advanced manufacturing sector.
Mentioned Peter's previous warning about inflation due to high demand and low supply.

Supply chain restructuring and resilience.
Impact of advanced technology and the challenges/opportunities it presents.
Transition to a lower carbon economy and its effects on manufacturing, including insurance costs.
Labor shortages and skill shortages as a global problem, affecting various sectors including manufacturing and tech.

Acknowledged Jason's introduction and thanked Salesforce.
Discussed Engen's role in creating ecosystems and economies of scale in Canada's business sectors.
Introduced his consulting work which focuses on providing bespoke advice to key customers.

Global financial crisis, pandemic, and other disruptive events have questioned the reliability of economic forecasts.
Mentioned opinions of Stephen Poloz, Mark Carney, and Klaus Schwab on the difficulties of forecasting.
Importance of distinguishing between what's different and what hasn't changed in the economy.

Four phases of the business cycle: peak, recession, recovery, and growth, with growth phases dominating most of the cycle.
Globalization has stretched the typical 10-year cycle to 20 years due to technology, communication, logistics, and labor constraints.
Longer cycles lead to exaggerated highs and lows, making economic corrections more severe.
Supply chain disruptions and geopolitical tensions add complexity to the economic landscape.

Retail sales and unemployment rates show a V-shaped recovery post-pandemic, contrary to initial pessimistic forecasts.
Driven by pre-pandemic pent-up demand, mid-pandemic savings, supply chain disruptions, and a period of underinvestment in the economy.
Shortages in supply chains have led to inflation, which central banks are trying to control through interest rate increases.

Inflation causes: unexpected demand, pent-up demand, and supply chain disruptions.
Inflation expected to subside gradually but can become problematic if not managed properly.
Interest rate increases are a necessary tool to combat inflation but risk inducing a recession.
Balance needed between monetary policy and fiscal policy to avoid conflicting impacts.

Investment is crucial for counteracting labor shortages and capital constraints, with a focus on international growth opportunities.
Importance of strategic investment in capacity and infrastructure for long-term growth.
Advised leveraging technology to address labor shortages by automating more processes.
Emphasis on the necessity of public investment alongside private investment.

Canada faces potential housing market bubble and high consumer indebtedness, posing risks to the domestic economy.
Export markets present significant opportunities due to strong global demand and Canadian companies should focus on these growth areas.
Differentiating between Canada and the U.S. economic cycles, with the U.S. having more growth runway.

Discussed the impact of inflation on the Canadian mutual funds market, advising to focus on export-oriented companies and sectors with constant demand.
Addressed the government's role in managing inflation through coordinated fiscal and monetary policy, emphasizing the risk of conflicting actions.
Highlighted the importance of regulatory policy in easing supply chain constraints and fostering investment.
Analyzed the potential risks of higher interest rates versus prolonged inflation for the economy.

Peter Hall provided an in-depth analysis of the current economic situation and its future implications for manufacturing and beyond.
Emphasized the importance of strategic investment and the role of technology in mitigating current economic challenges.
Acknowledged the ongoing support of Salesforce and thanked participants for joining the discussion.