8:40 AM Financial performance & economic outlook

The first panel of the day, moderated by Michael Armstrong, Director, PwC Vancouver, focused on the Economic Outlook and Financial Performance of the industry in calendar 2007 and the future. Patricia Croft, Chief Economist for Phillips, Hager & North, told delegates that the World Bank declared this as the worst credit crisis since the Great Depression. She outlined how the current sub-prime problems have created a tangled web of economic issues in the U.S. that have been building over the past 10 years. There is some optimism that the economy has now moved back from the edge of the abyss, and that it won’t take a further 10 years to unwind. Patricia outlined the relative financial stability enjoyed by Canada, but warned that with Europe, Japan, India and China all struggling, Canada will not escape this period of reduced growth unscathed (note that a recession is defined as <3% gdp growth). craig campbell, pwc partner, walked delegates through the “train wreck” currently faced by the forest industry, especially in british columbia. low commodity prices, a weak u.s. dollar and 19 million houses for sale in the u.s. have happened all at once to create financial results that are the worst in recent decades. he went on to explain how south american companies with plantation forests and new mills with modern technology make that the only region worldwide that is achieving the target minimum 10-12% return on capital employed. gail glazerman, ubs analyst, presented her view on an industry that has cut costs, controlled capital spending, increased productivity and hired new leaders from outside the industry but still cannot provide a reasonable return to shareholders.

Panelists

Craig Campbell
Craig Campbell
Partner,
PricewaterhouseCoopers
Vancouver, Canada

Gail Glazerman
Gail Glazerman
Director, US and Global Paper Analyst, UBS
New York, USA
Patricia Croft
Patricia Croft
Chief Economist,
Phillips, Hager and North
Toronto, Canada