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What if the recession never happened?

What if the recession never happened?

Posted on: 8/9/2018 | Author: ATB Financial's Economics + Research Team

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The provincial recession ended almost two years ago and indicators like monthly retail sales have recovered the ground they lost during the downturn. But it’s important to put this good news into context.

Take the aforementioned retail sales figures. Monthly revenue has never been higher, reaching almost $7 billion in May. But we need to remember that it wasn’t until May 2017 before monthly sales caught up to where they were in October 2014. Sales were below their pre-recession peak for 31 consecutive months. The hangover from a slump of this sort doesn’t go away overnight.

What’s more, if the recession had never happened and retail sales had continued to grow at, for example, the rate they did in the two years before the downturn, May’s retail sales figure would be $1.3 billion higher than it is. Although we’ve caught up to where we were before our economy starting shrinking, we are still not where we would have been if it had continued to grow.

We can’t, like the Cher song suggests, turn back time and pretend the recession didn’t happen. But we can put our progress into context by realizing that the wounds inflicted by a deep recession like the one we went through in 2015 and 2016 can take a long time to heal fully.

Retail sales, graph​​​​​

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