Pierre Cléroux, Vice President, Research and Chief Economist, BDC, returned to present the 2019 Economic Outlook to a sold-out MCC audience in January. The economy, how it performs, where it is going, and how it factors into the growth of Manitoba are always key discussion points among business leaders. Over the course of his 30-minute presentation, Mr. Cléroux touched on the current hot topics and their projected impact or non-impact on the economy.
Sinking oil prices, rising interest rates, jittery stock markets, trade disputes, Brexit, and non-stop manufactured crises in Washington — after 10 years of uninterrupted global economic growth — to the uninitiated, it seems like a recipe for recession.
Mr. Cléroux, however, is a recession-denier. “A lot of economists right now are looking for the next recession, but it doesn’t just happen. You need a shock (to start a recession). But we’ve looked to see what could make the economy turn into a recession and we do not see anything like that.”
Cléroux is forecasting slightly slower growth in both Canada and the U.S. for 2019, after what had been strong economic performance in both countries last year. But there’s no major economic bomb in sight for at least two or three years.
Employment is strong in both Canada and the U.S. The hot U.S. economy is spurring strong Canadian exports. (Manitoba’s exports to the U.S. were up 20 per cent in 2018.) He said U.S. demand is so strong the steel and aluminum tariffs have not even had much of an effect. Cléroux’s forecast is for “solid” growth across the country next year including Manitoba — 1.9 per cent for Canada, 1.7 per cent for Manitoba.
Yes, there are headwinds facing Canadian economies like the higher interest rate environment, falling commodity prices, cooler housing market, and slower retail sales in 2018. This is “the reason why the Canadian economy is slowing down, but it is still growing at (the normal rate), about 1.9 per cent,” he said.
Despite labour shortages, technological change, trade tensions, and rising interest rates, global economic growth and increasing exports, employment, and investments will ensure that Canadian economic expansion remains solid in 2019. To view the complete BDC report, please click here.