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Over Half the Year is Behind Us What Lies Ahead?

Mid year in Canada, 2014 and the economic mood across the country seems generally bland. Despite the improved mood many Canadians usually experience as the days grow longer and the sun shines brightly.

In the Canadian workplace there has been a general trend over the past few years towards more trepidation, battening down the hatches and a general malaise. This appears to have contributed to slower or less hiring by employers even when their own financial and labour needs could support hiring. This as coincided with an increase in employees who express a desire to leave their jobs while at the same time hanging on tightly. A recent study found that most Canadian’s respond that they are ‘happy’ generally and but a significant number also report a desire to make a job or career change with a large number reporting a desire to leave their current job.

These factors of malaise and trepidation can lead to a decrease in innovation and risk taking and an increase in relationship problems and mental health concerns. Mid-way through this year it seems that most Canadians are looking for signs of a positive change in the economy so they can relax but they are overly hesitant about believing beyond the weather a change is in the air.

What Do The Experts Tell Us About The Economy

Released mid July the Royal Bank of Canada’s (RBC) economic update are a continuation of the volatile economic trends we have seen consistently over the past few years. RBC reported:

  • Smaller than expected GDP (0.1%)
  • Falling employment rates and rising unemployment (9,400 job lost with an unemployment rate of 7.1%)
  • Nominal retail sales grew 0.7% (higher than expected but still, well, nominal)
  • Rising housing stats 0.6% (an unexpected rise perhaps due to milder winter weather in some regions)
  • Ongoing trade deficits for Canadian merchants ($0.15 billion)
  • A rise in the consumer price index (.1%)

In July The Conference Board of Canada presented the Canadian Outlook Economic Forecast Spring 2014 report with a cautious positive view for modest economic growth. Highlights from the report include:

  • The global economy expected to improve somewhat lead by performance in the US and Europe
  • Canadian households and exporters expected to contribute to a modest economic growth
  • The Bank of Canada expected to leave rates as they are

On the downside the report suggested:

  • Private capital investment will remain ‘soft’. Private capital investment has long been a driver of output and employment growth
  •  Uncertainty about the Canadian transportation infrastructure that can lead to problems in investment and hamper production.

Provincially Alberta is expected to continue to lead growth with Manitoba and British Columbia forecast to follow behind. The Atlantic Provinces and population rich Ontario will continue to struggle and Saskatchewan is expected to remain flat.

Taken all together these predictions suggest more of the same in terms of economic uncertainty and continue the pattern of Canadians being yanked from hopefulness to cautiousness.

The Psychology of Optimism

How you view any data and what it means to you is very personal. Generally people have a built in cognitive bias towards viewing information with negativity, called the negativity heuristic. This bias has long served as a survival mechanism allowing humans to avoid danger and plan for future deficits. During times of shortages a strategy of negativity can enable conservation of resources. However, it can also lead to an avoidance of risk taking, except in the most extreme times of scarcity when desperation may lead to poor risk taking decision making. A long time spent experiencing fear or cautiousness can reduce the ability of people to hear and accept good news and bounce back to optimism, even when the scarcity has passed. As a result good economic news is under appreciated.

The Canadian economy is expected to remain generally flat over the next year. Contributing to this is the reality that people are not able to let go of the patterns of battening down the hatches. However, the Canadian summer can offer an opportunity for an optimism bounce. If organizations take the opportunity to begin crafting a more optimistic message, not an unrealistic one, but one that focuses on the positive opportunities they may be able to generate a higher level of optimism among employees. An organization operating with more optimism will very often gain an advantage over the competition. In his 2011 book ‘The Coming Jobs War’ Gallup Chairman Jim Clifton said that Gallup’s research has demonstrated the value of optimism and employee engagement as keys to organizational success.

Reframe the News To Get A Boost

When sharing economic information that impact your organization you can choose to look at the flat data, the ongoing cycle of ups and downs and allow a negativity heuristic to keep the hatches battened down. As an alternative you can choose to reframe the news and focus on the opportunities created by the economy. By looking for opportunities, reframing information and focussing on what you can do to take advantage of what is available you may give your employees a boost that ignites innovation and even better individual health. A loss in one area often creates an opportunity in another. Be creative, involve your employees and look for the opportunities created and not the ones stalled or lost.