Canada’s economy is slowing as consumer spending and savings have shrunk, according to a study conducted by the Conference Board of Canada (CBOC). .“Economic commentary in Canada typically revolves around a recession and whether it will be a hard or soft landing, but slow motion might be a more accurate way of describing the coming years,” said CBOC Director, Economic Forecasting, Ted Mallett in a Tuesday press release. .“We believe the overall economy will be supported in large part by commodities, healthcare, and other sectors still on the mend from the pandemic.”.The CBOC forecasted Canada’s real GDP growth to increase by 1.3% in 2023, followed by a 1.1% gain in 2024. .It said consumer spending remains resilient amid periods of economic turbulence, but strong population growth has provided much of this support. Consumer confidence has improved over the past few months but remains low by historical standards. .The labour market is being weighed down by the deceleration of the Canadian economy..While employment growth exceeded expectations in the first quarter of the year, job growth is slowing and forecast to decline in the coming quarters, dipping into negative territory in the first quarter of 2024. .The CBOC acknowledged Canada’s labour market is likely to see major changes as rapid advances in artificial intelligence and their release through various applications have brought some unexpected twists..It said shorter-term effects will be more nuanced and the positive medium-term impacts will be seen in the applied sciences, management, culture, and recreation occupations..Inflation concerns in the US remain top of mind because its economy continues to expand. The CBOC anticipated US economic growth to slow in the second half of this year, but the economy will avoid slipping into a severe recession..More broadly, inflation in the global economy has declined in the world’s major economies — driven by lower energy and food costs. However, labour costs in the services sector of the world’s major economies continue to increase at a pace inconsistent with the 2% inflation target. .The CBOC concluded by saying Canada’s oil and gas industry has failed to achieve any significant increase in output so far this year. It forecasted a 1.2% contraction in the second quarter, attributed to maintenance activities in various oil fields and the impact of wildfires in British Columbia and Alberta..Former Canadian budget officer, Kevin Page, told the Senate Banking Committee in December an expected winter recession would have negative consequences for small businesses. .READ MORE: Economic slowdown will hurt small businesses 'significantly' says former budget officer.“It’s going to hurt small businesses significantly because with higher interest rates, people are not going to want to use credit,” said Page. .“We have to be careful.”
