Economic and Investment Update – April 2022
- The Consumer Price Index (CPI) continues to increase, rising 6.7 per cent year-over-year – the largest increase since January 1991
- Labour market indicates further tightening – national unemployment falls to a record low in March and employment gains continue for the sixth consecutive month, outpacing growth in the population aged 15 and older over the same period
- Real Gross Domestic Product (GDP) exceeds preliminary growth estimate in February, rising 1.1 per cent from the previous month
- Manufacturing sales increased in February in Ontario following a slight decline in January, driven by a significant increase in motor vehicle sales
- Ontario leads the decline in wholesale trade sales seen nationally in February following seven months of increases
- Small Business and Entrepreneurship sees demand for consultations driven by Professional, Scientific & Technical Services, Healthcare & Social Assistance, and Accommodation & Food Services in March
- Activate!Vaughan Smart City Challenge winner SWTCH Energy secures $16.5 million in funding to expand into the U.S.
- Vaughan-headquartered Drone Delivery Canada solidifies collaboration with Bell Mobility Inc. to improve 5G technology for drone performance
SELECT Economic Indicators
Pace of inflation rises for the third straight month above five per cent
The Consumer Price Index (CPI) rose 6.7 per cent on a year-over-year basis in March, the largest rise since January 1991. This is one percentage point higher than the 5.7 per cent increase in February, and the third straight month of increases over five per cent. In Ontario, there was a seven per cent increase over the same month in 2021, with prices increasing higher than the national rate. Canadians saw all eight major components rise in the CPI in March.
Gasoline prices rose 11.8 per cent month over month, a significant increase from the 6.9 per cent increase in February. Year-over-year, gasoline cost consumers 39.8 per cent more for gasoline in March. Global oil prices saw a sharp increase following Russia’s invasion of Ukraine.
Increases in groceries continued to rise, reaching 8.7 per cent more on a year-over-year basis in March, the largest yearly increase since March 2009. Dairy products and eggs rose by 8.5 per cent year-over-year, and pasta saw a 17.8 per cent year-over-year increase. The conflict between Russia and Ukraine additionally has affected wheat prices as both nations are major wheat exporters.
Prices for services rose 4.3 per cent nationally, with prices in tourism-related industries rising as tourism-related activities return. Dining in restaurants saw a 5.4 per cent increase year-over-year in March, faster than the 4.7 per cent increase in February. Accommodation prices rose 24.4 per cent year-over-year in March, and 3.7 per cent month-over-month from February, the fastest March increase on record. Despite these increases, month-over-month Ontario saw an increase of 26.6 per cent for food services and drinking places.
Wage data from the Labour Force Survey found Canadian wages rose 3.4% on a year-over-year basis in March. Average hourly wages have been increasing since the fall of 2021. However, these increases remain well below the growth seen in the Consumer Price Index.
Labour market conditions tighten as unemployment drops to a record low in March, employment gains outpace working-age population growth
Unemployment fell to 5.3 per cent in March for both Canada and Ontario, the lowest level since data became available in 1976. The Toronto Census Metropolitan Area (CMA), which includes Vaughan, maintained a higher unemployment rate than both Canada and Ontario, sitting at 6.2 per cent.
While unemployment fell in Ontario in March, youth unemployment (aged 15 to 24) still had the highest unemployment rate at 10.4 per cent. Unemployment dropped the most for adult men (25 years and over) with unemployment at 3.7 per cent. Sitting 1.5 percentage points below men, the unemployment rate for women increased in March, rising from 4.7 per cent to 5.2 per cent. The gap between the unemployment rate of men and women was most pronounced in Ontario of all the provinces, the sole province with more than one percent difference.
Nationally, core working-age men (25 to 54) saw their unemployment rate at a record low, while the unemployment rate for core-aged women was close to its pre-pandemic level. The participation rate, which measures the total labour force relative to the size of the working-age population, was at an all-time high for core-aged women (84.8 per cent) and the highest rate for core-aged men (88.6 per cent) since August 1991. The unemployment rate was higher among the overall visible minority population compared with those who were not a visible minority (6.1 per cent compared to 4.5 per cent respectively). Unemployment rates were notably higher among Black and Arab Canadians, sitting at 8.4 and 8.2 per cent respectively.
Hybrid work arrangements continue to increase. They were most common in professional, scientific and technical services industries, with just over one in ten (10.9 per cent) usually working part of the week from home and part from a location outside the home. The share of workers with a hybrid work arrangement also increased in the finance, insurance, real estate, rental and leasing (10.5 per cent) and information, culture and recreation industries (9.2 per cent).
Real Gross Domestic Product (GDP) increases by 1.1 per cent in February
Real Gross Domestic Product (GDP), which measures the inflation-adjusted value of goods and services produced in the economy, exceeded original growth estimates with an increase of 1.1 per cent in February of 2021. This represents the largest monthly growth rate since March of last year and the ninth consecutive month of growth as measured by economic output.
Goods-producing industries increased 1.5 per cent in February marked by the expansion of 16 of 20 industrial sectors. The construction sector expanded 2.7 per cent, with non-residential construction expanding 1.4 per cent and its eighth consecutive month of gains. Non-residential gains were led through alterations and improvements and new industrial building construction.
Tourism-related industries saw increases in real GDP, with accommodations and food services increasing by 15.1 per cent in February after declines the previous two months. Food services and drinking places drove the increase, growing 17.6 per cent in February, whereas accommodation services increased 8.8 per cent. Amusement, gambling, and recreation industries increased by 9.4 per cent, and performing arts, sports and related industries, and heritage institutions grew by 7.1 per cent.
Wholesale sales dropped for the first time in seven months in February
Wholesale sales declined for the first time since July 2021, dropping 0.4 per cent nationally in February. Ontario led the decline, dropping 1.2 per cent from the previous month. Sales decreased in five of seven subsectors – the subsector building material and supplies saw the largest fall of 6.9 per cent, and personal and household goods fell 3.3 per cent from January.
Wholesale trade economic output as measured by real GDP declined 1.1% in February, as five of nine subsectors were down.
February’s survey by Statistics Canada included questions assessing the impact of blockades of transportation routes on the wholesale sector. Demonstrations resulting in blockades resulted in a drop in sales of approximately $200 million in wholesale trade. A total of 15 per cent of wholesalers responded that their operations were adversely affected by these blockades, 93 per cent of whom indicated they had transportation and/or shipping problems and 35 per cent reported lower sales.
Vaughan’s wholesale trade industry accounted for 11.5 per cent of the City’s economic output and 6.1 per cent of its employment in 2021.
Manufacturing sales increased in February in Ontario following a slight decline in January, driven by a significant increase in motor vehicle sales
Manufacturing sales rose 5.1 per cent to $29.1 billion in February after a 1.3 per cent decline in January. Higher sales of motor vehicles were the largest contributor to the increase, rising 27.6 per cent, while food sales increased by 5.7 per cent. Year-over-year, total sales in Ontario increased by 17.8 per cent in February.
The Toronto CMA, which includes Vaughan, also saw a modest increase in manufacturing sales in February, posting a 3.7 per cent increase to $11.3 billion. Higher sales of food (7.2 per cent) and chemicals (10 per cent) led to these gains, which came after a 0.9 per cent decrease in January. Year-over-year, Toronto CMA saw an increase of 18.3 per cent over February of 2021.
The manufacturing industry accounted for 17.8 per cent of employment and 18.8 per cent of economic output in Vaughan in 2021.
LOCAL TRENDS, INVESTMENTS AND SUCCESS STORIES
Small Business and Entrepreneurship sees demand for consultations driven by Professional, Scientific & Technical Services, Healthcare & Social Assistance, and Accommodation & Food Services in March
ED’s Small Business and Entrepreneurship top five industries seeking consultations in March were:
- Professional, Scientific & Technical Services (18%)
- Healthcare & Social Assistance (14%)
- Accommodation & Food Services (14%)
- Retail Trade (12%)
- Arts, Entertainment & Recreation (8%)
Activate!Vaughan Smart City Challenge winner SWTCH Energy secures $16.5 million in funding to expand into the U.S.
SWTCH Energy secured $16.5 million through a Series A round and a credit facility to expand their Electric Vehicle (EV) charging solution across North America in multi-family buildings. SWTCH Energy provides end-to-end EV charging and energy management solutions. SWTCH was one of five winners of the Activate!Vaughan Smart City Challenge, taking home top place in the Electric Mobility Challenge. Through Activate!Vaughan, SWTCH received training and access to program partners and industry leaders.
Activate!Vaughan is a first-of-its-kind program in Ontario which connects high-potential entrepreneurs to market-driven opportunities and mentorship from industry leaders. Challenges have called on entrepreneurs and startup and scaleup businesses to propose innovative solutions to enhance the quality of life in Vaughan and beyond. In 2021, Activate!Vaughan took home awards from provincial and international economic development organizations, winning the Award of Excellence for Community Economic Development in Urban Communities from the Economic Developers Council of Ontario (EDCO), and the Gold Award in the Entrepreneurship category from the International Economic Development Council (IEDC).
Vaughan-headquartered Drone Delivery Canada solidifies collaboration with Bell Mobility Inc. to improve 5G technology for drone performance
Drone Delivery Canada Corp. announced a collaboration agreement with Bell Mobility Inc. for a three-year term. This agreement will result in Drone Delivery Canada working with Bell on the development of certain products and services to improve technology as it relates to 5G network and multi-access edge computing for autonomous drone performance. Drone Delivery Canada Corp., headquartered in Vaughan, is a drone technology company focused on the design, development, and implementation of its proprietary logistics software platform using drones whose platform is used as a Software as a Service (SaaS) model for government and corporate organizations globally.