Is a lower interest rate good for Windsor-Essex? It’s ‘complicated’

The Bank of Canada is cutting its key lending rate. CTV Windsor’s Bob Bellacicco shows us how the trade war is casting a shadow over the region.

There is only one word to describe the current real estate market in the Windsor-Essex area.

“Complicated,” said Maggie Chen. The president of the Windsor-Essex County Association of Realtors is encouraged by the Bank of Canada’s interest rate drop of a quarter per cent Wednesday.

“If the borrowing costs decreases, which means affordability goes up and it means that the activity will pick up, historically.”

Chen says a robust spring market was forecasted but investors are holding off because tariffs are making the economic environment complicated.

“If you are worried about your job security, you might hold off any long term financial commitments.”

Al Valente of Valente Travel says a lower interest rate may boost the travel sector as choice of destination changes.

“We expect more people to be looking at maybe destinations that they wouldn’t have otherwise chosen so maybe bypass the US and go to places like Europe, for example so [the lower interest rate] allows them to do that.”

The Bank of Canada lowered interest rates for the seventh consecutive time after a survey showed people were worried more about job security and financial health and were planning to spend less.

The bank’s survey included 100 businesses, and it found that many had lowered their sales outlooks with the decline most prominent in the manufacturing sector. The trade uncertainty also led many businesses to scale back hiring and investment plans.

A local staffing firm says there has been a 15 per cent dip in hirings over the last couple of months, but according to Workforce Windsor Essex job postings are up, including in the manufacturing field.

“[In the manufacturing sector in] February, 99 postings. March, 101 so far,” noted a surprised Justin Falconer, CEO of Workforce Windsor-Essex. “Looking at the first 11 days of March, if you compare it to the first 11 days of February, we’re actually up 23 per cent on job posting volume locally.”

A prolonged trade war may increase the cost of goods and weaken consumer spending, but Falconer senses companies are going to keep on keeping on. “They’re [companies] really just trying to keep their mind focused on getting that work done and shipping that work and they’re going to deal with the reality as they become clearer.”