Windsor likely not headed for recession in 2024, but economist warns caution may remain

Windsor is likely not headed for a recession in 2024 but it doesn't mean people won't feel the pinch or be more cautious about their spending in 2024, an economist and a Windsor researcher say.

"A recession is generally defined as two consecutive quarters of negative economic growth, so that's six months of the year back-to-back where the economy is shrinking. I don't think that's going to happen in Windsor," said Frazier Fathers, lead consultant and researcher with Community Policy Solutions in Windsor.

"But I think the broader question for Canada and Ontario [is] inflation, our major pressures on the economy and most importantly pressures on people and how they think about the economy, which is just as important in a lot of cases as what the actual numbers are doing."

WATCH: Windsor's economic outlook strong headed into 2024

Windsor's economic outlook strong heading into 2024, but researcher says consumers may be cautious

9 months ago

Duration 8:55

As the Conference Board of Canada predicts Windsor will have one of Canada's strongest economies heading into 2024, Frazier Fathers, a Windsor-based researcher, shares his thoughts on what this means for Windsor, the need for housing and Windsor's rental market for 2024.

It's boom time for people working in the skilled trades and building in Windsor, Fathers said, with new investments coming in and the NextStar EV battery facility and the Gordie Howe International Bridge both under construction.

But for people making a minimum wage or even a bit more, it's getting tougher to get by.

Across Canada, Fathers said about 40 per cent of homeowners are facing a mortgage renewal this year.

"That's going to impact a lot of people, you know, in just how much money they have in their pocketbook to spend at the end of the week or end of the month on discretionary things," Fathers said. "And so one of the real pinch points in our community this year to watch is, what does that small business, small community, small economy look like?

Fathers says Windsor's fates are often tied to the automotive industry with recent contract negotiation and big pay increases secured for autoworkers this year, as well as new investments and infrastructure, Windsor is now getting the "boom" of the boom-or-bust cycle.

"But I do think, you know, we have to be mindful that it is quite possible that the rest of Canada goes into recession," Fathers said. "If all the news is bad economic news and all you see here from the rest of the country is bad, that's going to impact what Windsorites do with their money too."

Canada not in a recession, despite public feeling: Economist

The economy is "a lot better than people will think," said Moshe Lander, a senior lecturer in economics at Concordia University.

"Interest rates are at 25-year highs, but ... interest rates are going to go down in the coming months,' Lander said. "Inflation is a little bit above the Bank of Canada's target, but it's well down from the 8.1 per centthat we saw in 2022 and the number kept falling through 2023. Unemployment is low by Canadian standards."

The number one thingdriving the Canadian economy this year will be interest rates, Moshe says. If they comeback to the one-to-three per cent number the Bank of Canada is aiming for in 2024, he anticipates Canadians will get a bit more optimistic with their spending.

But Lander says it's important to note that when economists talk about inflation slowing, they're not talking about prices falling: Only that the percent increase in prices will be lower than it has been in previous years.

"There's no returning to Big Mac meals costing $5," he said.