Welcome to 2019
“May you live in interesting times,” is an ancient curse frequently attributed to Confucius, the Chinese philosopher who is often cited as that culture’s only major religious figure. While I don’t know about that as I’m not an expert on either Chinese culture or religion, I do believe he’s made a valid point. I’m also afraid 2019 is going to be another of those interesting times, which have occurred far too frequently in recent times for my taste.
My reasons for thinking 2019 is going to be interesting are many. There are going to be two important elections in Canada this year. The federal one, which is expected sometime this fall, and the other will be in Alberta. Both will produce a lot of noise and be accompanied by much wailing, mud slinging and the usual gnashing of teeth. But the results won’t produce much in the way of immediate change even if the incumbents are turfed out and a new set of rascals is set in their place.
For example, the next federal government – regardless of who leads it – can’t change the simple fact Canadian consumer debt now stands at $1.78 for every $1.00 of disposable income. No so long ago, it stood at $1.60 – and we (as a people and society) have been cheerfully signing our fortunes away at an alarming and accelerating rate for the past 20 years. We certainly haven’t learned to live within our means. And, while this is happening house prices have been surging. So much so we now have affordability problems in our two largest housing markets.
One of our country’s other pressing economic problems is wage stagnation. Salaries haven’t been growing as fast as the rest of the economy. The primary reason for this is simple: many of the new jobs created over the last while have been relatively low paying positions in the service sector. There’s little any government can do about that.
The Conference Board of Canada is expecting Canadian consumer confidence to slide this year. When you consider the economy is really just the collective expression of individual Canadians going about their lives and doing things – whether he’s the teenager who cuts your grass on Saturday morning for $20 or the captain of your favorite NHL team earning $10 million a year – there’s little the government can do to influence how either views their prospects and outlook.
Our new free trade agreement with the United States hasn’t been signed yet and there are signs the Americans may not ratify the new accord. And there’s very little the government can do about that.
There are also signs both the U.S. government and the U.S. economy are facing varying degrees of turbulence over the coming couple of years. If economists dislike anything, it’s instability. People or events that rock the boat create uncertainty and in times of uncertainty, consumers tend to sit on their wallets. That means, they don’t buy things and the economy slows. There’s little the Government of Canada can do about that either.
Despite the bluster I can already hear, the next Government of Alberta won’t be able to force the people of British Columbia to allow that pipeline to be built. Personally, I find it curious that Alberta politicians of all stripes are blaming the federal government for the impasse when its their neighbours to the west who are saying no to the project. Mark my words, even if it is built, it won’t solve most problems the oil industry in that province will have to face in the coming decade. It’s also staggering to realise Alberta’s political leadership seems unable to address any of the other economic issues and opportunities facing this country’s fourth largest province. There are things besides oil.
For those of us working in the furniture, mattress and major appliance sectors this means we must work smarter than we did last year and the year before that. People are still buying. In fact, the Conference Board says at least 30% of consumers in this country say now is a good time to buy. There are a lot of smart people in this business, so we’ll find them. My job is to point out where the potholes are so the industry can navigate around them. There will be just be more of them. Welcome to 2019.