Survey findings reveal nationwide employment concerns
Recession fears are looming large as a new report from the Angus Reid Institute unveils the extent of these anxieties among Canadians.
The survey revealed that 50% of Canadians under 55 think they might lose their jobs in the event of a potential economic downturn.
This level of job loss apprehension hasn't been seen since the early days of the pandemic. The report noted, "The fear of job loss has stuck with Canadians in recent years, despite the historic low in unemployment that followed the lifting of COVID-19 restrictions."
CIBC's senior economist, Andrew Grantham, pointed out that per-person spending in Canada is significantly below pre-pandemic levels, nearing figures seen only during recessions.
This downturn in spending has already started to take its toll on employment, particularly in sectors like retail, restaurants, hotels, and personal services. After barely reaching pre-pandemic employment levels in mid-2023, these industries have seen a decline in job opportunities. This concerning trend raises the spectre of a potential "vicious circle" in which reduced spending leads to further job losses.
Younger Canadians have less financial cushion than in previous periods of elevated job loss concerns, according to an Angus Reid analysis. Many said they could not afford an unplanned expense exceeding $1,000 in the near term. Within just two years, Canadians' ability to handle unexpected expenses has retreated to pre-pandemic levels, driven by high inflation eroding savings and purchasing power.
Notably, 40% of those surveyed admitted they could not contribute to retirement or savings plans due to insufficient funds, emphasizing the challenges faced by individuals in their prime working years.
Housing affordability also plays a significant role in this financial unease, as high rates burden renters and mortgage borrowers alike. The report indicates that 45% of renters and 29% of mortgage borrowers stated that an extra expense of over $250 would be financially untenable.
Sign up here to get the latest mortgage news delivered straight to your inbox.
