Dec 10, 2024

I meant to say “multi-factor aggravation”. When you hit that while driving and drinking a Tim’s, your life becomes a dangerous skill-testing challenge. I suspect we all have learned that but reading the weekend newspaper helps me to see the multi-factors making decision-making a huge challenge. How can people plan and run their businesses when so many variables are changing rapidly? In the Saturday, December 7^th edition of the Globe & Mail Report on Business, Ecconomics Editor Matt Lundy wrote that Canada‘s unemployment rate had jumped to a multi-year high. My first reaction to the news was that it might make it easier for the marine industry to find the people we need to run our businesses. The story noted that Canada’s unemployment rate rose to 6.8% in November from 6.5% in October and excluding the Covid pandemic, this was the highest jobless rate since January 2017. But, it gets so confusing. He writes that it was a robust month for hiring with employers adding 50,500 jobs in November, double the analyst expectations.

On the other hand, those gains didn’t keep pace with a strong increase in the number of job seekers. That increase was driving the increase in the unemployment rate. He also noted that investors were increasing their bets that the Bank of Canada will cut its key interest rate by half a point on December 11. The rate is currently 3.75%.

Lower interest rates are good because we believe that this will stimulate boat buyers to get back into the market, especially now when we need them to help clear out aged inventory. The article also included comments from Doug Porter, Chief Economist at Altus Group, who said that the downside to aggressive rate cuts, would be that the Canadian dollar could weaken further, especially given the growing trade uncertainty with the incoming Trump administration. While the declining interest rates make boats more affordable, the other circumstances probably will increase the price of new boats. The United States is turning in hot economic data so there will not likely be any rate relief in the United States, and a rate cut here is likely to devalue our currency in a way that will probably not boost economic activity and will make new boats from the United States, even more expensive. This divergent path for monetary policy is weighing on the Canadian dollar, Matt Lundy wrote, and the Canadian dollar is at its lowest levels since early 2016 relative to the US dollar.

The article also noted that the ranks of the unemployed have risen 22% over the past year. One would hope that change would improve the odds of the marine industry finding the new people we need, but the economic environment seems very uncertain as we head into boat show season. For small business decision-makers, I think it’s multi-factor aggravation.

Andy Adams – Editor