Photo by Scott Blake on Unsplash
Are we headed towards a recession" And if so, what should architecture firms be doing to prepare"
Over the past months, the Bank of Canada has steadily increased its policy interest rate, in a bid to control inflation and find a ?soft landing? for the economy that tames excessive spending, while avoiding a recession.
?Higher interest rates will help slow demand and allow supply time to catch up. Consumer spending will moderate as the pent-up demand from pandemic restrictions eases and the cost of borrowing increases,? said Bank of Canada Governor Tiff Macklem in a press conference in mid-July. ?Housing market activity is already cooling rapidly from unsustainably high levels during the pandemic. And slower global growth will reduce demand for our exports.? John Mollenhauer, president and CEO of the Toronto Construction Association, has said that since the construction sector is currently so busy in his city, even if a full-blown recession were to hit, it would only result in a modest reduction in activity.
Some firms have economic resilience built into their business model. Architect Oliver Lang and partner Cindy Wilson are co-founders of Vancouver architecture firm LWPAC as well as a sister company, Intelligent City, which produces modular, mass timber housing.
?Housing is probably the most price-sensitive, interest rate-sensitive product there is,? says Wilson. ?In times like this, when the cost of materials is so high and intere...