What the Global Economic Slowdown Means for Your Business
Before we dive in - a little warning - we’re putting on our economist hats today.
You already know I’m nerdy in all the best ways (I love to read stuff like economic outlooks, financials, academic journal articles, spreadsheets that tell a story…). And this week, I went all out.
So today's newsletter is a bit more technical than usual - grab a coffee and settle in because understanding why the global economy is slowing is exactly how you'll rethink your strategy, protect your profit margins, and stay two steps ahead of whatever 2026 brings. Here we go!
Let’s talk about the elephant in the (board)room: the economy.
“Global growth is projected to slow to 2.6% in 2025 - well below the 2000 - 2019 average of 3.8%.” - International Monetary Fund, World Economic Outlook: October 2025, p. 3.
Translation? The world’s economic engine is idling.
Trade volumes are flattening, investment is cooling, and global interest rates are staying higher for longer. The IMF even warns that “fragmentation” - think geopolitical tensions, regional supply chains, and less cooperation between major economies - is quietly shaving off growth across the board.
What does this mean for Canada?
Canada’s GDP is expected to grow by only 1.2% in 2025, barely keeping pace with population growth. That’s essentially “standing still” once you factor in inflation and rising input costs.
Translation: business owners like you will need to work smarter, not harder, to grow real profits. Expect slower demand in export-heavy sectors (agriculture, manufacturing, natural resources), and a trickle-down slowdown that eventually reaches even professional services and retail.
Unemployment is projected to rise from 6.4% to 6.9%. Labour markets are finally loosening, which means hiring might get a little easier - but customers will likely rein in their discretionary spending as household budgets tighten in response to the global slowdown.
Oil prices are forecast to drop from USD $79 to $68.90 per barrel.
In Western Canada, that’s more than just a stat - it affects provincial revenues, capital investment, and overall business confidence. The IMF calls this “a normalization after years of volatility,” but for local owners, it often translates into slower project approvals, delayed expansions, and more cautious lending.
So no - it’s not a recession (yet). But it’s definitely not a party either.
We’re entering what the IMF calls a “slow and steady” economy - one that looks fine on paper, but feels sluggish at the local / provincial level.
What this might look like for your business:
Your clients are taking longer to buy.
What used to take two weeks now takes two months because budgets are being reviewed three times before anyone signs.
Cash flow feels tighter.
Invoices drag, retainers are delayed, and suddenly everyone’s “waiting until January” to move forward.
The big project you thought would land in Q4?
It’s now “early to mid-next year,” which means your forecasted revenue just got pushed down the road (and your stress level up).
Your team’s getting restless.
With fewer new projects, some are under-utilized while others are still drowning - creating uneven workloads and frustration.
Your own focus is slipping.
You’re checking the news more, second-guessing decisions, maybe cutting expenses that were actually driving growth.
Friend: it’s not you - it’s macroeconomics.
And when demand softens, the knee-jerk reactions start flying.
Some business owners hit pause on everything (“we’ll just cut marketing until things pick up”), while others ignore the slowdown entirely and keep spending like interest rates are still 0.25%.
Neither strategy works.
Because what the IMF data really shows isn’t a complete collapse - it’s a shift. Global trade isn’t collapsing, but it’s definitely flattening out.
So what's next for small business owners in Western Canada? Well, you don't need a “let's create growth at all costs” plan. You need clarity about:
What’s actually driving profit,
Where your margins are quietly shrinking, and
Which parts of your operation can (and should) be made more efficient. Stat.
So, here’s what I’m recommending clients start looking at right now - not next quarter, not “when things stabilize,” but right now, while everyone else is still pretending this slowdown is temporary:
Revisit your strategic plan - and make sure it's based in (this new) reality
-If your 2026 projections still assume 4-6% revenue growth, it’s time for a reset. The IMF’s forecast of 2.6% global GDP growth and 1.5% for Canada in 2026 means top-line expansion will come harder and slower. This isn’t the year to chase “growth for growth’s sake.”
-Instead, focus on profitable growth - tighten up your margins, get ruthless with unprofitable lines of business, and double down where your firm has a genuine competitive edge.
Leverage the cooling labour market
-With unemployment expected to rise to 6.9%, the war for talent is finally easing which means you can afford to be strategic instead of desperate.
-Now might be the time to upgrade your team: replace mediocre performers, add missing skill sets, or finally hire that operations lead you’ve been putting off because “no one good was available.” Consider this a once-in-a-decade opportunity.
-Caveat: as a faithful reader of this newsletter, please please please revisit the “revenue per employee” brief in conjunction with any hiring decisions (link: https://www.tanyabuddconsulting.ca/blog/the-hiring-metric-no-one-talks-about).
Reinvest inflation savings into productivity.
-Inflation in Canada is projected to normalize near 2% by late 2025, which means cost pressures are finally coming off.
-But instead of pocketing the savings, consider putting that $$$ into automation, AI, and workflow systems that permanently lower overhead and reduce dependency on manual labour. Think of it as building a profit moat - one that keeps you efficient even when interest rates and wages start creeping up again.
Friend: the economy is shifting - and the smartest entrepreneurs aren’t waiting to see what happens next.
They’re already making quiet, behind-the-scenes adjustments - tightening operations, hiring more intentionally, and streamlining how work gets done - to stay profitable in the new economy.
If you want to be one of them, let’s talk.
Let's have a quick fit conversation to see if working together would help you stabilize and scale your business for what’s coming next.
Book an intro call here: https://app.acuityscheduling.com/schedule/b7d824d2/appointment/67912755/calendar/3086653?appointmentTypeIds[]=67912755