Ask the Fuel Expert

As managers we all want to be in control. If not it costs us money. Everything from operations expenses, to equipment, to labour and all costs from computers to fuel must be controlled. And those things we can’t control, we must manage around. Over the last two and a half years we have had to manage our businesses around uncontrollable economic factors. Wherever we turned pundits were explaining the recession. In Canada we were not hit as hard as our friends in the US, but still we had some devastating effects. I hope you made it through.

Like many companies we had to adjust to the harsh realities of the economy. I always try to look on the positive side of any situation but it has been a challenging time for us and all of our six thousand plus clients. Now it seems there is an end in sight. I, for one, am pleased to announce we are retiring the “R Word.” And there are some good reasons for doing it too.

Whether you are in the construction, transport, earth-moving, marine, rail or other industries there are many positive indicators about the Canadian economy. Here are a few notes taken from recent reports and studies that give me good reason to think the worst is behind us in Canada.

Statistics Canada released some numbers on employment showing Canada’s job creation in January was more than four times the median forecast, pushing the Canadian dollar to its strongest level since May 2008 and adding to evidence the country’s economic recovery may be accelerating. They report that employment rose by 69,200 and the labour force increased by 106,400. The jobless rate rose to 7.8 percent from December’s 7.6 percent, as more people sought work. Economists forecast 7.6 percent unemployment and job growth of 15,000, according to the median estimates of 25 and 26 economists surveyed by Bloomberg News.

Before we open our wallets we need more confidence in the economy and that is just what we are starting to see today. Mark Chandler, head of Canadian currency and rates strategy at Royal Bank of Canada’s RBS Capital’s Markets unit in Toronto says, “This adds confidence to the notion we are headed for a better year for growth and growth in the job market,” He adds, “There isn’t a lot of slack in the labour market in Canada, certainly on a relative basis to other countries.”

Canadian policy makers have been dealing with the impact of a strong currency and a slowdown in growth of household and government spending that crimped the economic recovery in the second half of last year. Bank of Canada Governor Mark Carney stopped raising interest rates after September and Finance Minister Jim Flaherty scaled back plans to exit stimulus.

“The bank is very cautious but I think this should tip the scales a little bit for them,” said Dawn Desjardins, assistant chief economist at RBC Capital Markets in Toronto, adding the central bank will still “need to see more” evidence before resuming rate increases.

I appreciate those educated words, but more important is a strong showing of confidence from the business sector. You know those guys who put their money on the line and invest in Canada. Guys like Wal-Mart. On January 26, 2011 it was reported that Wal-Mart Stores Inc., the world’s largest retailer, will open 40 “supercentres” in Canada by the end of January 2012, creating 9,200 construction and store jobs. Now that shows confidence.

As far as our business and our clients, we are getting some positives back from eastern and western Canada. Dale Peters, our Regional Sales Manager for Ontario, reports that his clients are cautiously optimistic about this spring and summer. He says, “A couple of our construction clients have added new equipment.” Dale adds, “Many of our transport clients are seeing revenues improve slightly with good prospects for the next few months.”

Statistics Canada reported that private companies boosted their payrolls by 22,700 during January and Public-Sector Employment increased by 26,400. Even more good reason to retire the “R Word.”

At 4Refuel we are working with our clients to help facilitate new growth in the upcoming months. We have always helped to minimize your fuel consumption with fuel management solutions for all industries. During the recession we helped you tighten your belts when cash flow was more important than ever. Oops, I used “The R Word.” I promise that won’t happen again.

Jack Lee
Founder and Chairman
4Refuel Canada LP