Regina – We’ve been hearing about the potential implications of dropping oil prices for some time, but could a recession be one of them?
Two new reports paint a less than ideal picture of Saskatchewan’s economic future.
The first by Mainstreet Technologies shows more than half of residents in the province polled believe a recession is looming.
The second issued by the Canadian Federation of Independent Business shows that small business optimism in the province is at a five year low.
Marilyn Braun-Pollon with the CFIB said Wednesday that falling oil prices and recent municipal property tax hikes are taking a toll on small businesses confidence.
“It’s not the time to raise the alarm bells or press the panic buttons,” she explained. “But it is a snapshot of time of a level uncertainty.”
Residents’ pessimistic outlook stems mostly from the drop in oil prices and warnings of belt tightening from the government.
The CEO of the Regina and District Chamber of Commerce, John Hopkins, said it doesn’t help that stores like Target and Future Shop are shutting down in the city, even if that is not directly related.
“We have positive things happening in agriculture, and positives in terms of manufacturing particularly as we see the Canadian dollar lower. That makes our products more competitive on the global market place,” said Hopkins.
Communities reliant on the oil industry will feel an impact, and only 41 per cent of Saskatchewan companies are reporting their overall state of business is good.
However, the owner of Tangerine Food Bar, Aimee Schulhauser said it’s important to anticipate these fluctuations.
“It is concerning, but I think with challenges you have to rise up to meet them. We’ve built up a good resilience to changes,” she added.
David Loblaw with Chocolates by Bernard Callebaut in Regina said he’s actually seeing the opposite of an economic downturn.
“We’ve actually increased store hours,” he said.
The head of the economics department at the University of Regina, Hafiz Akhand said we can expect a reduction in economic activity but the fear of a recession is misplaced.
He adds the impact of that fear is actually more concerning than a recession because consumers may begin to spend less.
“We expect things in anticipation of that, we act prematurely, and then that gets reinforced,” said Akhand.
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