The Oakville Chamber of Commerce hosted their annual Economic Outlook breakfast on January 21st. While it is not all sunshine and roses, Ontario is faring well.
Economic Outlook Speakers
- Robert Hogue - RBC Senior Economist
- Sean Simpson - Ipsos Vice President
- John Baird - Eurasia Group Senior Advisor, Hatch Global Strategic Advisor & Bennett Jones LLP Senior Advisor
According to Robert Hogue, an Economist at RBC, global expansion is slowing. Canada saw one of the longest economic expansion periods in its history. Hogue is not as worried about an impending recession. The interest rate yield curve has righted itself. Also, China/US trade agreements and Brexit are being finalized. These factors makes the future seem more certain.
Businesses are able to make plans and feel more confident. Our economy is running on cruise control but there are plenty of opportunities for innovative and ambitious companies. Winning market share will be key.
Manufacturing
We have seen a slow down in manufacturing which represents 11% of Canada’s economy.
Manufacturing used to make up 20% of the economy so this is not as impactful as it would have been before. Ontario’s manufacturing sector performed pretty well in 2019 considering the GM strike, the rail strike and the trade wars.
Service Sector
The service sector has also performed quite well, especially Information and Communications Technologies and professional services. These are real bright spots in the Canadian economy.
Employment
The same can be said for employment. Companies have to be very active in finding, developing and taking care of workers. Our unemployment rate is 5.6% which is pretty close to full employment.
The population in Ontario grew faster than it has in 19 years. This puts pressure on infrastructure and housing prices.
Interest Rates
He predicts that interest rates will increase only a small amount. There is no desire to make it easier for people to spend more on housing.
Gaging the mood of the country
Sean Simpson, Vice President at Ipsos has been polling Canadians for years and brought some interesting points.
While he agreed that the economy is doing okay, he said that 65% of Canadians don't feel like they are getting ahead and 82% said it is less affordable than before.
There has been a steady decline in how people feel about the economy and whether it will improve over the next six months.
Only 17% feel that their personal fortunes will improve.
A large portion of Canadians are within $200 of not paying their bills. Any company helping clients, customers or employees will be appreciated.
Simpson said that right now, the best brand in Canada is Costco because they help Canadians afford more "stuff".
Global Perspective
John Baird brought the global perspective to the conversation. He talked about the impacts of our strained relationship with China, the power keg in the Middle East and the fact that Canada/US relations are probably at the lowest point since the war of 1812.
When asked about the minority government, Baird said that it will likely be stable through 2020.
At the Economic Outlook Breakfast, Christie Henderson, Managing Partner of Henderson Partners, did a masterful job of taking the questions from the audience and managing three very different personalities on stage.
World Economic Forum ranks Canada 14th in their Social Mobility Report.