In December 2011, the Canadian industry saw an economic upturn, something that was quite unexpected. A direct result of holiday spending, Canadians’ generosity proved beneficial to the somewhat unfruitful economy of 2011.
Estimated in late December, BMO found that Canadians’ spending and expenses were expected to reach $1598.80 per person throughout the holiday season—good news for Canada, overall. Due to holiday gift giving, family dinners and travel, Canadians amplified the economy. WestJet, as an example, had a fairly high capacity in passenger travel due to Canadians’ pursuit of spending the holiday with loved ones.
Although Canada saw this economic upturn in the late months of 2011, the economic outlook isn’t picture perfect for 2012. In a survey conducted by the Economic Club of Canada and Pollara Strategic Insights, it was found that Canadian residents are actually “more worried than ever” about Canada’s economy in 2012.
The poll found that many believe their income will fall below cost of living, a statistic seen for the first time in 15 years. Even more, 70 per cent already believe Canada is in a mild recession.
The poll, conducted online, surveyed 2,878 Canadians through mid-December. The survey found economic optimism low, with only 25 per cent of surveyors feeling optimistic—compared to 2010’s figures of 36 per cent and 2009’s that reached 54 per cent. It seems that many have a fairly negative outlook on Canada’s recovery from the 2008 economic crisis.
"This is the most pessimism we've seen, except for briefly in 2008, since 1996," said Michael Marzolini, Chairman of Pollara Strategic Insights, in presenting the poll findings at The Economic Club of Canada's annual Economic Outlook. "Canadians not only believe we're now in a recession, but expectations for the length of the recession are actually longer than they were in any year since 2008."
On the other hand, the poll found that Canadians believe that Canada is the best place to be during this estimated economic downturn. The poll found that Canadians do not expect the US to do well in the upcoming year. 54 per cent expect the US economy to worsen in 2012 and 63 per cent expecting the global economy to do the same.
"We should also recognize the impact this economy is having on specific groups," said Rhiannon Traill, President and CEO The Economic Club of Canada. "42% of students are very concerned about paying for their education, 31% under age 25 are very concerned about finding a job, and 46% of women with children are very concerned about paying for their children's education."
In the end, not everyone in Canada expects economic doom. In early January it was found in a survey conducted by Sage that small business owners actually have an upbeat economic outlook, with 43 per cent expecting a better year than 2011. Sage’s results found small business is less concerned about issues such as the global economic crisis and the rating of the Canadian dollar.
Either way, 2012 is in for a wild ride. Forecast and predictions are just that—estimations—and as we enter the new year it seems Canadians, no matter if they’re positive or negative, seem to agree that they’re in the right location to ride out the potential economic volatility.