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The Bank of Montreal is predicting Canada and the United States will post gross domestic product growth of 2.5 per cent next year.

The growth essentially reverses a similar decline this year.

The bank is also predicting that the era of zero interest rates will come to an end just after mid-year in Canada and not soon afterwards in the U.S.

However, borrowing costs are expected to remain exceptionally low as central banks will wait until they are absolutely certain the recovery has taken root before hiking aggressively wired payday loan.

Despite the growth, the Bank of Montreal is predicting the jobless rate will still average 10 per cent in the United States and 8.5 per cent in Canada next year.

Inflation, however, is expected to remain subdued, averaging 1.5 per cent in Canada and about two per cent in the United States.

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Home remodelers are getting less bang for their bucks. For the fourth straight year, renovation jobs have added less to resale values relative to their costs, according to an annual Remodeling Cost vs. Value Report released this week by the National Association of Realtors.

The average remodeling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8%. That was down from a cost-to-value ratio of 67.3% in 2008, when the average was $49,866 and the added value was $33,568.

One common renovation, a mid-priced bath remodel, for example, runs an average of $16,142 and adds only $11,454 to the resale value of a house — recouping just 71% of its cost. In 2008, the same job cost less — $15,899 — and typically added $11,857 to the home’s value, recouping 74.6%.

The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.

"Once again, this year’s report highlights the importance of a home’s first impression," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Ron Phipps, a real estate broker in Rhode Island, said how the house looks from the outside is more important than ever.

"If you’re driving down the street and the house doesn’t have great appeal, it doesn’t matter how nice it is inside," he said.

But here’s the kicker: Clients are savvier than ever in their shopping. Even though the costs of home improvements are less likely to be returned on resale than they have been in prior years, sellers may still have to bite the bullet and do the remodeling if they want their house to sell at all, he said.

"It’s kind of intriguing," said Phipps. "Buyers are using the unimproved houses to negotiate lower prices, but they wind up buying the remodeled homes."

So, if there are two similar houses in the area, buyers will use the listing price of the one that has not gone through a metamorphosis to get the seller of the renovated house to slash their price. Buyers want to pay for the caterpillar but get the butterfly.

Seller must play along if they want to make deals. "You get to sell the house more quickly if you do the renovations," Phipps said.

Biggest pay-offs

The major job that returns most in resale value is an upscale replacement of siding using fiber-cement. The job costs an average of $13,287 but increases home value by $11,112, or 83.6%. A vinyl siding replacement returns 79.9% of costs.

Adding a basement bedroom is also fairly cost effective, averaging $49,346 but adding $40,992 in value, an 83.1% return.

"Increasing livable square footage with a new deck or an attic bedroom is usually more valuable than just remodeling existing space," Phipps said.

The return on investment for some jobs varies greatly by region.

In New England, where winter are long and cold, vinyl window replacements reap a better return than they do in the warm South Atlantic region, where poorly insulated windows don’t mean as much expensive heat leaking away.

So, although replacement windows cost more in New England — an average of $11,155 — they add $9,152 to home values there, recouping 82.3% of their cost. In the South Atlantic states, they cost $9,705 but add just $7,417 to home values, 76.4% of their cost.

On the other hand, buyers in the South Atlantic seem to reward sellers for adding living space more than they do in New England. Maybe thrifty Yankees hate having to heat those extra rooms.

Finishing a basement returns 84.4% of its $55,357 cost in the South Atlantic and only 64% of the $65,715 New Englanders spend for the job.

Among the remodeling jobs faring the worst in return on investment were large, upscale kitchen remodels. They cost an average of $111,794 in 2009 and added $70,641 in recoupable value, just 63.2%.

That was down a whopping 7.5 percentage points from their 70.7% return on investment in 2008 . At the height of the housing boom, in 2005, upscale kitchen renovations returned more than 80% of their costs.

"A lot of the things that, historically, had huge value, don’t have as much today," said Phipps. "If you want to redo a kitchen, it may no longer make as much sense to use upscale appliances — Viking ranges, Sub-Zero refrigerator. Buyers may not pay any more than they would for a home with GE appliances instead."

Of course, most remodeling jobs are done to please homeowners. Any increase in home value is a bonus, not an end in itself. But for anyone thinking of selling in the near term, keeping an eye on the bottom line is always a good idea. 

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Kate Hanni was involuntarily bumped off US Airways flights in Phoenix not once, but twice, because those flights were oversold.

It took her nearly 36 hours to get from one end of the country to the other — without weather delays — and in the wake of that ordeal, she put her foot down.

“I haven’t flown with US Airways since,” said Hanni, founder of FlyersRights.org, a nonprofit that represents airline passengers. She also canceled her frequent flyer membership with the carrier.

Stories like Hanni’s have become increasingly familiar among travelers, and Tempe-based US Airways isn’t the only one taking heat from disgruntled customers.

The industry has been hit particularly hard by the recession and customer service has been on the backburner as airlines struggle for survival. The industry saw all-time lows in 2007 for on-time performance, mishandled baggage, denied boardings and customer complaints.

But for the past several years, US Airways in particular has found a home toward or at the bottom for customer service satisfaction ratings among the major domestic air carriers.

The airline now has some of the highest baggage check-in and in-flight service fees and its employees are some of the lowest paid in the industry, according to FareCompare.com. Experts say more layoffs and fewer flights coming early next year likely won’t improve staff morale.

After surveying 12,900 domestic travelers, the J.D. Power & Associate’s 2009 North American Airline Satisfaction Study concluded that US Airways ranked last in customer satisfaction among the traditional networks.

“US Airways’ overall customer satisfaction has been steadily declining for the past four years,” said Dale Haines, senior director of travel and hospitality practices at J.D. Power.

That’s about the same time the airline officially merged with America West in 2005, which some critics say hasn’t been completely successful.

“Management values trickle down into every aspect of these businesses,” said Dean Headley, associate professor of marketing at Wichita State University in Kansas, who has conducted the Airline Quality Rating report since 1991.

“The blending of two philosophies is very hard,” he said.

Despite the criticism, the U easy to get unsecured personal loans.S. Department of Transportation’s Air Travel Consumer Report indicates the airline has improved this year. The report measures monthly data from airlines as well as the number of complaints the DOT receives from consumers.

In its third-quarter report, US Airways boasted about ranking first in on-time arrivals for August, with an 81.4 percent on-time arrival rate among the six big domestic carriers as measured by the DOT. The carrier improved to 87.9 percent in September.

The company also reported September was its lowest mishandled baggage rate, at 2.14 per 1,000 passengers, since January 2002. Its overall number of complaints also dropped nearly 50 percent in the third quarter compared with the same period last year, according to the report.

Numerous requests to speak to top-level US Airways executives for this story were denied. US Air spokesman Andrew Christie said a renewed commitment to listening to customer feedback through a committee of senior-level employees largely has contributed to the improvements.

WSU’s Headley said US Airway’s improvements shouldn’t be glorified because the industry as a whole has improved this year. Data compiled by the Airline Quality Rating also show that leading air carriers’ performance improved in 2009 for the first time in five years.

Haines said the consumer report is a poor representation of what consumers really think. At the same time the DOT reported industry improvements in 2009, J.D. Power found that overall airline customer satisfaction declined for a third consecutive year to a four-year low.

“Unfortunately, any improvements in customer satisfaction are being offset by passenger displeasure with cut-backs on in-flight services, increases in fees and issues with helpfulness and courtesy of flight crews,” Haines said in a press release.

But Headley is more optimistic about the future. With less traveler volume, airlines like US Airways can focus more on improving customer service, among other things, which will hopefully continue when the economy begins to recover.

“It’s clear from the rankings that now is the time to invest in new infrastructure and upgrade technology. Now is the time to innovate,” he said in a press release.

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WASHINGTON–The U.S. economy flashed a warning sign of inflation Tuesday, but the recovery is so fragile that experts say a scenario of runaway prices and higher interest rates is a long way off, if it happens at all.

Overall wholesale prices jumped 1.8 per cent in November, the department of labour said, more than double the gain expected. Core inflation, which excludes energy and food, rose 0.5 per cent, the sharpest increase in more than a year.

The U.S. government will release its look at consumer prices on Wednesday instant payday loan. Economists predict a more moderate gain of 0.4 per cent, with core consumer prices expected to rise 0.1 per cent.

U.S. auto sales, meanwhile, will rise 20 per cent in 2010 as the industry starts recovering from its worst year in almost three decades, according to a forecast Tuesday from the Michigan-based Center for Automotive Research.

From the Star’s wire services

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Gary Rodrigues, the former longtime Hawaii director of the United Public Workers Local 646, has paid the labor union $378,103 in restitution as part of a court order resulting from his 2002 embezzlement conviction, the U.S. Attorney’s office said Monday.

A federal jury convicted Rodrigues and his daughter, Robin Haunani Rodrigues Sabatini, of embezzling money from the union and taking kickbacks in connection with an employee welfare benefit plan in November 2002.

Both were also found guilty of mail fraud, health-care fraud, money laundering and conspiracy.

In 2003, Rodrigues was sentenced to more than five years in prison and Sabatini was sentenced to nearly four years but both remained free on bail while they appealed their convictions guaranteed payday loan.

Their appeals were denied by the 9th Circuit Court of Appeals in San Francisco in 2007. They tried to appeal to the U.S. Supreme Court but the appeals were declined in 2008.

Rodrigues is serving his sentence in a federal prison in Taft, Calif. and his daughter is imprisoned at a federal facility in Dublin, Calif.

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Accenture PLC said on Sunday that it will end its sponsorship of Tiger Woods, the second major sponsor to withdraw from the golf star amid headlines about domestic turmoil.

Gillette was the first to announce plans to stop using Woods in its promotions during his announced hiatus from golf folowing a car accident and reports of extramarital affairs.

Redwood City-based Electronic Arts Inc.(NASDAQ:ERTS), meanwhile, has stood by the star whose face and name are on its computer golf game. Also standing with the embattled golfer is AT&T Inc. (NYSE:T) and Nike Inc. (NYSE:NKE).

"After careful consideration and analysis, the company has determined that he is no longer the right representative for its advertising," Accenture (NYSE:ACN) said Sunday.

The consulting company, which has an office in San Jose, had placed Woods as the centerpiece of its advertising. The company said it will immediately transition to a new campaign that had been scheduled to launch next year.

Gillette issued this statement on Saturday: "As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs."

AT&T said in a statement, "We support Tiger's decision and our thoughts will be with him and his family Low fee payday loans. We are presently evaluating our ongoing relationship with him."

EA also issued a statement last week, saying, ""We respect that this is a very difficult, and private, situation for Tiger and his family. At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged."

An online Business Pulse survey being conducted this week by the Silicon Valley/San Jose Business Journal shows most believe Woods brand still has some value, although diminished (44 percent). Another 24 percent said they will never bank on his name again while about 29 percent believe the Woods brand is untouched or will bounce back.

Woods golfed for two years for Stanford University before turning pro and was inducted into the school's hall of fame at the annual big game with rival University of California just days before his the accident that triggered his recent problems. He was surprised by the boos of Cal fans, whose team went on to upset Stanford, 34-28.

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U.S. Treasury debt prices fell on Thursday, sending 30-year yields to four-month highs, after a poorly bid long-bond auction rekindled worries over the huge federal budget deficit.

The government sold $13 billion of 30-year bonds in an auction that was weak on all measures and suffered from its year-end timing, when many financial market professionals are reluctant to commit funds for such long-term investments.

However, the gaping U.S. budget deficit will outlast the seasonal factors and some analysts worried that the sloppy long bond auction was a sign of tough times to come for a government that has tried to borrow its way out of a credit crisis.

"It was pretty ugly. The old lump of coal in the stocking," Kim Rupert, managing director of global fixed income analysis at Action Economics LLC in San Francisco.

"It is just going to be a difficult year ahead fiscally and with respect to monetary policy and also the markets. I think today’s 30-year auction could just be the harbinger," she said.

The 30-year long bond fell rapidly after the auction, pushing yields up as far as 4.51%, their highest since August.

They were last down 30/32, yielding 4.48% versus Wednesday’s close of 4.42%.

The benchmark 10-year note fell 8/32, yielding 3.47%, versus Wednesday’s close of 3.44%. During the selloff, benchmark yields rose to a four-week high of 3.52%.

However, the market recovered from its worst levels as both 4.50% 30-year yields and 3.50% 10-year rates have been seen as attractive levels by some investors to get into bonds paperless payday loans.

The 30-year auction ended this week’s three offerings totaling $74 billion. Though that’s below the weekly record of $123 billion set in October, it is a lot of debt to sell in a traditionally quiet time of the year.

"This was a sloppy reception to the long end of the curve, largely driven by the lack of players at year-end," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York.

Though analysts blamed seasonal factors for the poor results, given that many money managers focus on bookkeeping and window dressing this time of year, it could leave the market jittery going into the new year.

The burgeoning U.S. national debt has placed extraordinary focus on bond auctions this year, especially after investors appeared to question the longevity of the United States’ prized AAA rating for a brief time back in May.

Government borrowing shot higher this year as Washington paid for bailouts of the financial sector and measures aimed at stimulating the economy amid the worst recession in seven decades.

Ironically, signs of economic recovery, such as last week’s surprisingly low job-loss figures, could put more downward pressure on the bond market as investors demand higher yields or respond to the temptation of riskier assets such as stocks. 

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Visa and MasterCard now have prepaid cards, which provide enhanced security for online shopping. They’re issued by Canadian financial institutions and sold in large retail chains, such as Shoppers Drug Mart.

But when buying prepaid cards, you have to beware of hidden baggage they carry – such as monthly fees, activation fees and expiry dates.

Mary Vandersteen ran into problems trying to use her Vanilla Prepaid MasterCard with her PayPal account.

"I only use prepaid cards for online transactions with companies I don’t know," she says, "because once the funds have been used up, the companies cannot add any more service fees or charges without my knowledge."

Needing help with a severance package, she did a Google search and found FairSeverancePay.ca. She agreed to make three deposits of $100 each with the prepaid MasterCard, which she linked to her PayPal account.

PayPal rejected the first deposit, but later accepted it when she found a staff member to help her. Then it rejected her other attempts to make a $100 payment using the same card.

"So far, I have paid $4.36 to PayPal and I can’t complete the transaction," she says.

The problem is that prepaid Visa and MasterCard gift cards can be purchased anonymously, says Darrell MacMullin, general manager of PayPal Canada.

"Whenever you add a financial instrument to PayPal, we like to make sure you are who you say you are. In this case, there was no user information associated with the prepaid card. When we check and no information comes back, it throws up a red flag in our system."

PayPal charges $1 for each attempt to authorize a payment card and refunds the fees once the card is authorized. (Vandersteen got a refund once I contacted the company.) But PayPal won’t authorize a card unless it can identify the user, MacMullin emphasizes.

Hal Whitcomb ran into problems trying to use his My Treat Visa prepaid cards, issued by Citizens Bank in Vancouver.

"These were gifts from the parents of the softball team I coach. They are advertised as just like cash," he says. "However, there’s an activation fee. There’s also a monthly administration fee after a few months. I’ve also found they have expiry dates, despite the laws that prevent expiry dates on gift cards."

Citizens Bank spokesman David Chong said Visa and MasterCard gift cards can be used anywhere that Visa and MasterCard credit cards are accepted.

"They are what we call `open network’ cards. As a result, issuers like us have to give 24/7 access to cardholders. There are significant costs to ensuring this occurs flawlessly."

Activation fees are a common industry practice to cover the expense of printing and packaging the cards, as well as to reimburse merchants, he explains.

The monthly administration fee kicks in after the first few months of ownership. However, most cardholders use up their entire card balances in one transaction or within a month or two after receiving their cards, Chong says.

As for expiry dates, Ontario and other provinces do have laws banning expiry dates on gift cards. But Visa and MasterCard fall under federal law and don’t have to abide by the provincial rules.

So, if you get a prepaid Visa or MasterCard card, try to make a major purchase right away. Don’t let them linger in your wallet, piling up fees.

Next week, we’ll dig into those online offers of "free samples," which end up enrolling you in expensive monthly plans.

eroseman@thestar.ca

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Arizona Public Service Co. has spent $8.5 million in the past four years on a program to help lower the cost of energy saving compact fluorescent lightbulbs.

Since 2005, the company has provided a discount of about $1 per bulb to retailers to help keep the cost low. Under the program, there have been more than 8.8 million lights sold through participating retailers.

The program is funded by fees charged to customers and approved by the Arizona Corporation Commission paperless payday loans.

APS officials estimate its customers will save about $350 million over the lifetime of the bulbs, which can last five years or more.

To further encourage people to switch their lighting habits, APS has rolled out an online calculator that can estimate the savings at homes that switch to CFLs.

For info: www.aps.com/MyCFL

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Chevron Corp.’s $40 billion Australian natural gas project will drive a global hunt for construction workers and has prompted calls to ease immigration rules to prevent labor shortages and cost overruns at energy and mining projects fueling the country’s economy.

Contractors for Chevron and partners Exxon Mobil Corp. and Royal Dutch Shell Plc in the Gorgon liquefied natural gas plant plan to pay premiums of as much as 40 percent for welders, pipe fitters, project managers and engineers, recruiters said. They expect to hire in the Middle East, Latin America and Europe.

Gorgon is the largest of more than a dozen LNG ventures in Australia targeting Asian demand for cleaner-burning fuels. It will compete for staff with Woodside Petroleum Ltd., which said Nov. 20 the cost of its $12 billion Pluto LNG project may surge by as much as $1 billion, partly because of labor expenses.

“This doesn’t bode well for Australia’s mega projects,” Woodside Chief Executive Officer Don Voelte said in a Nov. 25 interview at the Perth headquarters of the country’s second- largest oil and gas producer. “It’s going to be a stretch when more than one company is trying to build these things.”

The Chevron and Woodside investments are among more than $90 billion of resources projects expected to generate about 40,000 construction jobs in Western Australia alone, a state government report shows. Voelte wants the federal government to relax immigration regulations for overseas workers and has started an equity incentive plan to retain staff.

Labor ‘Race’

“For Woodside we believe it is a race to capture or not lose the workforce to Chevron, a significant risk for Woodside’s growth plans,” JPMorgan Chase & Co. analyst Mark Greenwood wrote in a Nov. 25 report.

About 80 natural resource ventures to be built in the next decade may increase demand for skilled workers by as much as 70 percent, Energy Minister Martin Ferguson said in a Nov. 30 speech in Perth to mark the start of construction of Gorgon on Barrow Island, a nature reserve about 50 kilometers (31 miles) off the northwestern coast.

Prime Minister Kevin Rudd has tasked a group of government, immigration and industry officials to help companies such as Chevron and BHP Billiton Ltd. find 70,000 workers in the next decade, making Gorgon its top priority.

“A series of cost overruns could discourage future investments,” Gary Gray, chairman of the Rudd-appointed group and Parliamentary Secretary for Western and Northern Australia, said by phone. “The urgency is to ensure as best as we can the adequacy of labor to deliver projects on time and on budget.”

Wage ‘Premium’

About 80 percent of oil and gas industry employers in Australia said in a survey they intend to increase salaries in the next 12 months, Matt Underhill, managing director at recruiting firm Hays, said from Sydney. Professionals in the pipeline industry currently earn $191,000 annually on average in Australia, he said.

“The expertise is specialized, so there’s going to be a premium paid for that type of labor,” said John Hirjee, an analyst at Deutsche Bank AG in Melbourne same day payday loans. Labor may account for 10 to 20 percent of costs at Australian LNG projects, he said.

Contractors may offer workers as much as 40 percent more than they could earn in Sydney to entice them to Barrow Island, said John Downing of Downing Teal Pty. The company and other recruiting firms hiring for ventures including Gorgon will extend their search to the Middle East and Latin America, he said.

Serbian Sparks

Leighton Holdings Ltd., whose units have won A$1.3 billion of Gorgon work, has in the past hired electricians in Serbia and welders in South Korea, said spokesman Justin Grogan.

Officials with Western Australia’s Department of Training and Workforce Development have met with Chevron to discuss labor needs, Simon Walker, an executive director at the department, said in e-mailed comments.

The department is working on a proposal to tackle the looming shortage and “strategic immigration will be a key consideration factored into the plan,” he wrote.

“Capacity constraints can lead to escalating labor costs, increasing prices and ultimately, they can threaten the viability of enterprises, which negatively affects economic growth and the well-being of the population,” Walker said.

A Chevron advertising campaign to tout Gorgon includes a television commercial with the line “creating thousands of jobs and providing opportunities for generations to come.”

‘Sexy’ Gorgon

It’s a “sexy project” that should have an advantage in securing labor, Colin Beckett, the venture’s general manager, said on Barrow Island in October. A thousand applicants have chased 30 or 40 positions in some cases, he said. Welders and instrument technicians will prove harder to find.

Conditions for those living on Barrow Island, where average temperatures reach as high as 34 degrees Celsius (93 Fahrenheit), will be improved by access to the Internet, cable television, gyms, swimming pools and a golf driving range.

“We think Barrow Island will be attractive to a lot of people,” Beckett said.

One Gorgon contractor is offering A$300,000 ($280,000) for a manager to assess risk and as much as A$135,000 for a contracts administrator, according to advertisements placed by Downing Teal. Engineers will earn “well into six figures,” John Downing said.

A labor shortage that confronted Australian mining and energy during a previous boom is set to return BHP Chief Executive Officer Marius Kloppers said last month. “Just two short years ago there was a massive talent gap in the resources industry,” he said in a Nov. 18 speech. “I believe this gap will return along with demand.”

Gas project developers have built the risk of rising labor bills into their plans and are having LNG processing units built in lower-cost Asian countries and reassembled in Australia to cut expenses, Deutsche Bank’s Hirjee said.

“That’s not to say these cost blow-outs may not happen,” he said. “They could.”

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