Manitoba, like rest of Canada, faces dimming economic outlook: report By: Gabrielle Piché Posted: 3:04 PM CDT Thursday, Oct. 26, 2023

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Fewer job openings and sluggish economic growth are likely in Manitoba’s future as Canada grapples with a recession, an outlook from Desjardins predicts.

“We are coming into a period where demand is slowing, overall economic activity is slowing,” said Marc Desormeaux, principal economist of Canadian economics for Desjardins.

The financial service co-operative forecasts employment growth in Manitoba of just 0.4 per cent next year, a significant drop from the 2.1 per cent estimated for 2023 and the 3.7 per cent of two years ago.

“Some sectors will feel it more acutely,” Desormeaux noted, highlighting real estate and leasing.

Overall, there may be a slowdown in employment, but not a net loss, he underlined.

“It’s… going to be a little tougher to find jobs or to keep jobs,” said Fletcher Baragar, a University of Manitoba economics professor.

The changing economy “will probably shift the balance a bit,” he added.

Over the past year, several unions have gone on strike, using the tight labour market to further their bargaining negotiations and “catch up” with wages, Baragar said.

“I think that that window of opportunity… is going to start to close as we move into 2024,” he said.

Manitoba’s forecasted employment growth rate is comparable to other provinces in Desjardins’ predictions and surpasses the 2024 national average of 0.3 per cent.

“The Canadian economy seems to be moving very close to almost a no-growth situation,” said Baragar.

Both this year and next, Manitoba will likely do “relatively well” compared to the rest of the country, he stated.

Desjardins predicts Manitoba’s real gross domestic product will grow 0.5 per cent year over year in 2024, surpassing the national average of 0.1 per cent.

Ontario and British Columbia are predicted to backslide in real GDP — losing 0.1 per cent each — and Quebec is expected to stagnate.

Manitoba isn’t as reliant on its housing market, nor is it dependant on a singular sector, helping it during the possible recession, Desormeaux explained.

“Across Canada, we will increasingly feel the impacts of the interest-rate hike,” he said.

The Bank of Canada has raised its key interest rate 10 times since last year. It now sits at five per cent.

Policy changes of the kind can take up to two years to reach their full impact. The housing sector — and related fields, such as financing — could be greatly affected, Desormeaux said.

“We think it’ll be a mild recession by historical standards,” he added, mentioning the recession of the 1990s and the global financial crisis in 2008.

Manitobans typically have lower levels of household indebtedness than others across the country, meaning they might outperform Canada’s average consumer spending over the coming year, Desjardins’ report outlined.

The company released its 2024 outlook on Tuesday.

Manitoba’s exports outpace increases in other provinces, and it has had one of the best rates of full-time hiring growth of late, the report states.

Weather-related agriculture disruptions remain a risk for Manitoba’s economy, it says.

gabrielle.piche@winnipegfreepress.com