Mackenzie Minute: February 3, 2017
Phil Taller, Senior Vice President, Portfolio Manager and Head of the Mackenzie Growth Team, discusses increased wage growth in the U.S. and the search for productivity.
One thing we are finding interesting these days is increased wage growth in the U.S. After six years of pretty anemic wage growth, wages have started ticking up over the last six months or so, to a level where they are growing a fair bit faster than inflation. If companies do nothing, then their profit margins will start dropping, so we think there is an increased tailwind for companies to go and find ways to make their people and their assets more productive.
We’re deep into quarterly earnings season here and one thing we are seeing and hoping to see more of is many of those companies in the technology realm, especially who we think can help with corporate productivity, demonstrating the kind of growth that we expect. So far it’s been pretty good.
In U.S. Mid Cap Growth, which is our key mandate, we do have a fairly big exposure to technology, and in particular, on this search for productivity theme, we own a number of business process outsourcing companies that we’ve added in the last year or so. These are companies that will take a business process off the plate of their clients and do it better, faster, cheaper, which is a key thing we look for in all our companies.