With the number of workers entering retirement now outpacing the growth of the working-age population in Canada, businesses may be able to navigate an economic slowdown without mass layoffs, National Bank Financial Inc. (NBF) says.
In a research note, NBF economists said they remain somewhat optimistic about the prospect of corporate layoffs — and the impact on household disposable income — in the year ahead. And the reason for that optimism is the wave of retirees.
“Currently, nearly one-third of the people who leave their jobs and the workforce each year do so for retirement reasons, an all-time high,” it reported.
As a result, “for the first time in history, retirements are outpacing growth in the working-age population (ages 15-64) on the eve of an economic downturn.”
As the effects of higher interest rates work their way through the economy, slowing growth and curbing labour demand, companies may be able to avoid major job cuts.
“Never before has an aging population allowed employers to reduce their workforces so significantly through attrition rather than mass layoffs,” the report said.
NBF’s current forecast is that, following its latest rate hike, the Bank of Canada is now done raising rates — and that it may be cutting them once again by the fourth quarter of next year.