Brace yourself for this next thought. Ready? The economy isn’t as bad as all the breathless prose and dour prognostications about it might have you think.
Don’t believe it? Consider that investment in non-residential construction hit $11 billion in Q4 of 2008, up 1.7% from Q3. And the country’s jobless rate — currently at 6.6% — is still one of the lowest in recent memory. Employment at Canada’s auto assembly and parts factories actually increased by about 1,300 workers in October. It’s true that the sector employs some 11,000 fewer people than a year earlier, but almost all the decline was in the parts sector. The Detroit Three and the Japanese manufacturers actually held their own. The wheels of the economy aren’t exactly falling off, although the tires are losing some air.
Let’s face it: dried-up consumer spending didn’t turn General Motors into a hobo. Decades of poor decisions and inflated labour contracts did. The icy economy didn’t lead Nortel to the brink of bankruptcy. Years of corporate malfeasance and mismanagement did. That doesn’t change the reality that both companies find themselves in today. Job losses sting, especially in smaller towns ill-equipped to compete for replacements. And if Nortel (Canada’s biggest R&D spender) and GM (one of our biggest corporate employers) go under, it will definitely hurt. But some people have forgotten that we’ve had recessions before — and most good companies emerge relatively unscathed.
Perhaps it’s time we took a collective breath and properly assessed the situation we’re in. Before companies start laying off employees by the thousands in a misguided attempt to be proactive, they should take a more considered approach, and cut when necessary. In other words: DON’T PANIC.
Now’s the time for companies to retool or redeploy people where they are needed. Now’s the time government has to step up and spend on the infrastructure that is sorely needed for Canadian businesses to remain competitive in the years ahead. We don’t need more pork-barrel spending and bailouts. What we do need is some reasoned leadership.