Does anyone think Canada is headed for a recession too

[Tango]

I've been watching the news and listening to people talking lately and here are some of the things I am hearing:
-there have been 19,000 job cuts, mostly in the manufacturing sector, due to the high dollar
-gas is going to be 1.50 a litre by summer according to the news
-dh said he has seen cunstruction companies back filling holes for new home starts in some subdivisions
-bil gave up his day job and took a shift work position that is more secure
-some people I work with say that if interest rates go up they may lose their home
-Everyone seems to have a lot less expendible income.
I'm just wondering if you think Canada is headed for a recession, if so what indicators have you noticed?
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Krissy

[miss_thrifty]

no i think were alright for now. As long as the US market doesnt crash, I think we'll be fine. I'm keeping and eye on the news regulary.

[monkeywrangler71]

I've been watching the news and listening to people talking lately and here are some of the things I am hearing:
-there have been 19,000 job cuts, mostly in the manufacturing sector, due to the high dollar
-gas is going to be 1.50 a litre by summer according to the news
-dh said he has seen cunstruction companies back filling holes for new home starts in some subdivisions
-bil gave up his day job and took a shift work position that is more secure
-some people I work with say that if interest rates go up they may lose their home
-Everyone seems to have a lot less expendible income.
I'm just wondering if you think Canada is headed for a recession, if so what indicators have you noticed?
______________________________
Krissy

1) Overall -19,000 jobs in December, but +370,000 for the year, the unemployment rate is only 5.9%, and employment has grown for 15 consecutive years. Manufacturing employment has been declining for years, offset by gains in other sectors.
2) "The News" said that Al Gore was going to be the President of US in 2000. They also said that gas was going to be $1.50 a litre last summer.
3) Maybe they had legal and/or zoning problems, or simply overestimated how many they could sell. Maybe the housing need in your area has been met for now.
4) There are always jobs being restructured in any industry, your bil's job being unstable is not indicative of the economy as a whole.
5) Those people bought more home than they could afford. Interest rates over the past decade have been ridiculously low (I renewed once at 1.75%), today's rates are perfectly reasonable. Plus, the BoC is expected to drop the rates next week.
6) Wages increased in 2007 by 4.9%, the CPI only increased by 2.5%. Someone must have more expendable income.


I expect an economic slowdown and a volatile market. I don't see any indication of worse.

[mommy4ever]

I agree with monkeywrangler. I don't see Canada going into recession. There will be slowdowns in certain areas. Housing around here is still booming! I'm so glad we bought when we did, our home is valued at nearly 500K!! There is NO way we could afford that now.

Dh works in an industry that may be slowing down, but there are other companies that do similar work, that won't. So it'll mean a change, after 8 years, would suck, but it wouldn't be the end.


Less expendible income... maybe because many of us Canucks have lived beyond our means and our money goes to make the payments.

Foreclosures, around here there aren't that many, lots of refinancing to the new fancy 40 year mortgage! OMG! Why??? but I guess when a little townhouse is selling for 300K, what are the youth of today to do? I can't imagine a 40 year amortization.

There will be dips in different industries, in different areas of the country. Just like there always have been. Ontario has been hit hard with the auto industry. But some other area will pick up. Employment shows that.

[monkeywrangler71]

I have a follow up question.

For any that do expect/fear a recession in Canada, how many are from, or living in, Ontario? We all know that everything in this country is regional, and I just wonder if the local, personal, and anecdotal evidence is maybe stronger in Ontario because of it's heavy reliance on manufacturing. Whereas the west is still booming, and most Maritimers have been through this so many times already that it doesn't really feel like news.

[mommy4ever]

I'm in Western canada.

I don't think we'll get a full blown recession, however I do think there'll be some slumps.

[Tango]

Thanks for your replies. As for your follow-up question I'm in western Canada. I do feel we have a very strong economy here. I think the information I'm getting is mostly from people that are over spending and want to find a way to comfort themselves. My poor dh is probably just trying to get along wtih them. As we don't seem to be having a hard time. His family is from the east coast and honestly they seem more positive about the economy than the people out here. It's comforting to me that it seems to be a rather small group of people that are saying this. I'm thinking consumerism is the issue with these people, rather than the economy.
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Krissy

[Daisygirl]

Interesting point about the region, MonkeyWrangler. I am in Ontario and I work in the automotive industry. People are buying fewer cars, that much is for sure. Our company sales are down nearly 20% from last year.

In the service department we are showing record losses. At a meeting I went to with other dealerships, we are not alone - it is all over the region.

I don't know if car sales and repair orders really relate to the economy in general, but there is definitely a trend of people not spending like they used to.

I see it two ways. It hurts my pocketbook and puts my job on shaky ground, that of course is bad. But I also wonder if people are starting to display a little more common sense in their spending. Maybe this "recession" is an eye-opener for some who are accustomed to spending beyond their means.

Think of this: the average new car payment at our dealership (and I work for Dodge, not Mercedes or BMW) is $690 a month! That is higher than my mortgage. I cannot imagine spending that on a car!

Ok, I will stop now cause I am starting to ramble.

OP: Yes I see a slowdown, and I am planning for it.

[miss_thrifty]

The building of new houses never cease around here in PEI and there are jobs but not as many high paying ones as we would like. As far as consumerism , yes I agree its way too much, too exspensive of houses(keeping up with Jones) because of lower int. rates) and people thinking that their jobs will always be there. yeah right!!! Not here in pEI. unless your in union or gov. section forget it. You have to have a trade that will always be needed.

[rachelMcK]

I think there will be a slow down, prices will go up, but for the most part, people will be ok. I think the only people who will suffer are the people that don't have any expendible income now. If prices go up, then they suffer more.