The economy has already been showing indications of reduced growth. Commodity costs are reducing, that will reduce the income from the resource sector. Meanwhile, our prime dollar leaves many producers waiting on hold by their finger nails. Consequently, Alexander needs the stock exchange to consider a breather. "We are kind of past due for more subdued profit growth," he states. This type of downturn can come like a shock to traders who have started to depend on double digit gains to sustain their life styles when confronted with rising prices.
Even Alberta, our economic star, might be lined up for any substantial correction. Gartner forecasts Alberta's economy is placed to slow from last year's ferocious seven percent growth to some more "workable and healthy rate," around four percent. But a gentle landing is in no way guaranteed. The commodity marketplace is prone to global conditions a significant downturn in China or India may likely put our economy on ice.
Most importantly, it's Canada's tight work market which has many economists most worried for that country's wellness. "It isn't sustainable," states Fairholm. "We have had way too strong employment growth for the own good. Only at that rate, we are likely to exhaust employable people and essentially result in a wage inflation problem." He claims the work shortage has taken its toll on some industries. Companies within the Calgary oil patch are scaling back their exploration because work cost is excessive. Several firms have needed to fly employees into Fort McMurray using their company areas of the province to operate changes. "It's become uneconomic," states Fairholm. "Because of the cost of oil nowadays this is a pretty stunning statement."
The worry among economists would be that the hangover in the wild party from the last couple of years can last well in to the next recession, even while inflation is constantly on the have a bite from our buying energy. Canadians might not have seen any real earnings gains throughout the boom, but try settling for any raise throughout a downturn. What we should may soon learn is, the only real factor worse than the usual boom is really a bust.