Statistics Canada has employment rates in Manitoba rising to 30,250 in the fourth quarter of 2022. Contrary to a typical recession, labour demand is higher than the supply, making this recession one of a kind since the great depression.
This imbalance is triggered by two factors.Investors are staying optimistic and businesses that retrenched their employees during the pandemic are hiring their staff back. This trend is seen in both service rendering and manufacturing industries alike. In a typical recession where Central Banks (In our case Bank of Canada) employ quantitative tightening to reduce liquidity in financial markets, results tend to be higher interest rates, employee retrenchments, and increased costs in energy and or housing sectors. We are experiencing all three while companies continue to hire more and more.
Recession in and of itself is not necessarily a bad thing but we need to look at it as an economy trying to cleanse itself. This process can last several months or years depending on the status of the global financial markets. What makes this recession complicated and undetermined include Russia's attack on Ukraine and the strength of the US dollar which is globally used as a financial yardstick for measuring countries' economic successes.
Despite the uncertainties and high-interest rates, there is a silver lining. Our generation has seen at least two major recessions in our lifetime and we strongly believe that if we got out of the 2007-2009 great recession, we will be out of this one as well. It is just a matter of time. It is advisable for households to cut down on their expenditures and try to save as much as they possibly can. We need to prepare for the worst while hoping for the best. But it is easy said than done.
There are families that are barely trying to make ends meet, while others have maximized their credit expenditures. It is advisable that those without jobs and who are able to work accept the opportunities that are open in a number of local industries, especially right here in the Pembina Valley. Organizations such as Regional Connections have great resources that can be used to help those who are looking for job opportunities. Companies are holding job fairs and career expo events with intention of hiring. All these can be used by families to bring extra financial support to the table.
Manitobans are generally resilient people and I believe that the hope that has brought us this far, is the same hope that will carry us through this recession. The government of Manitoba in collaboration with the federal government has issued financial support to families through direct cheques. While these tokens help consumers alleviate day-to-day service expenditures, a better long-term plan needs to be put in place. These can include minimal increments in interest rates over a longer period of time or a sharp increase in interest rates over a short period of time. The former is more appealing and challenging to implement as this is a global issue and not just a domestic affair.