BC’s economic recession insulation factor could be headed for a tough stress test in 2022.
Inflationary clouds building on the horizon are promising a fiscal disruption that will demand much more than political spin doctoring for the economy to avoid serious damage.
Recession resiliency through economic diversity is the recurring theme of the sermon delivered from the political pulpit in Victoria. And it has a reassuring ring to it for the electorate, but it hits less appealing notes if the volume from supply chain dysfunction, human resource deficits, trade partner discord and other market noise becomes overwhelming.
Also, it is going to take far more than government public relations enthusiasm to ensure B.C.’s economy weathers the looming recession.
The current combination of inflation factors has not been around for decades; combined on the heels of a global pandemic, all the same market factors have likely never been around for B.C. in the modern era.
So, a lot of businesses and business leaders have not had to wrestle with all the same factors at the same time and therefore do not have an agile game plan for surviving in extended recessionary times.
Key elements to that plan need to include rethinking supply chain alternatives, ordering and delivery lead times, talent attraction and retention, customer relations, product pricing and cost controls.
Meanwhile, back in the B.C. legislature, attention needs to be focused on cultivating investment in innovation and productivity improvement.
Upwardly spiralling inflation amplifies the need for both, even though supply chain disruptions and escalating interest rates deter those investments in the private sector.
Crises separate wheat from chaff in all areas of the free market system.
The current combination of challenges facing B.C. will confirm which factor in that equation the province has more of and whether its recession-resiliency-through-economic-diversity mantra is more than political vapour.
