Economic and Investment Update – August 2022
- The Consumer Price Index (CPI) rose by 7.6 per cent in July, down from the 8.1 per cent increase seen in June
- The Conference Board of Canada’s Consumer Confidence Index increased for the first time in three months by 2.3 points, rising to 75.1 in August
- National unemployment rate maintains a record low of 4.9 per cent in July
- Real Gross Domestic Product (GDP) increases slightly in June, rising 0.1 per cent
- Small Business and Entrepreneurship sees demand for consultations driven by Professional, Scientific & Technical Services, Retail Trade, and Accommodation & Food Services in August
- Vaughan-headquartered SpaceRyde’s profile continues to grow following its grand opening in June
- Trillium Network for Advanced Manufacturing highlights Vaughan-based Prodevco Robotic Solutions
SELECT Economic Indicators
The Consumer Price Index (CPI) rose by 7.6 per cent in July, down from the 8.1 per cent increase seen in June
The Consumer Price Index (CPI) increased by 7.6 per cent in July, a drop from the 8.1 per cent year-over-year basis in June. Ontario’s CPI also increased by 7.6 per cent in July. Gasoline prices dropped 9.2 per cent from June to July but remained 35.6 per cent more than prices paid in July 2021. Ontario drove price increases for natural gas, which saw an increase of 45.3 per cent year-over-year for the same period following the Ontario Energy Board’s approval of rate increases which came into effect at the beginning of July.
Food prices increase more from the previous year in July than in June with an increase of 9.9 per cent, in part due to elevated prices for wheat.
The Conference Board of Canada’s Consumer Confidence Index increased for the first time in three months by 2.3 points, rising to 75.1 in August
The Conference Board of Canada’s Consumer Confidence Index rose to 75.1 in August, indicating that worry over future finances was relieved slightly, likely due to falling fuel prices. However, the prevailing sentiment by consumers remains pessimistic. Pessimism over current finances increased to 33.5 per cent. The index also indicated that Canadians have become less confident about the availability of future jobs, with only 16.8 per cent of Canadians optimistic there will be more job opportunities available in six months – the lowest this indicator has been in 18 months.
As an economic indicator, consumer confidence offers a signal of future households’ spending and saving. The Conference Board of Canada’s Consumer Confidence Index is based on a survey of Canadian households, measuring their optimism about the economy’s health. It is important to note that consumer confidence is often seen as a lagging indicator, as survey results may be largely covered by what has already happened in the economy.
National unemployment rate maintains a record low of 4.9 per cent in July
National unemployment maintains a record low of 4.9 per cent in July, the lowest level since data became available in 1976. In Ontario, unemployment increased slightly from 5.1 per cent to 5.3 per cent, while the Toronto Census Metropolitan Area (CMA) – which includes Vaughan – dropped for the first time since May to 5.7 per cent.
Youth unemployment in Ontario (aged 15 to 24) increase slightly to 10.7 per cent, while unemployment increased by 0.6 per cent for adult women (25 years and over) in Ontario to 4.9 per cent and decreased to 3.9 per cent for adult men (25 years and over).
Ontario saw a fall in employment of 0.4 per cent in July, losing 27,000 jobs. Noteworthy employment losses in the province included wholesale and retail trade and educational services in July. Employment rose in both manufacturing and finance, insurance, real estate, rental and leasing.
Hourly wages for employees rose 5.2 per cent compared with the previous year in July, the same rate of increase seen in June. Despite the increase, the rise in wages still falls behind the rate of inflation, decreasing purchasing power for Canadians.
Workers who spent most of their work hours at home increased slightly in July to nearly 1 in 4 Canadians (24.2 per cent).
Real Gross Domestic Product (GDP) remained unchanged in May
Real Gross Domestic Product (GDP), which measures the inflation-adjusted value of goods and services produced in the economy, increased by 0.1 per cent in June. This increase closes the second quarter of 2022, where the economy expanded by a modest 0.8 per cent as measured by economic output. The quarter’s increase of 1 per cent represents the fourth consecutive quarterly increase of real GDP.
The increase of interest rates caused by the Bank of Canada saw decreases in output for finance and insurance, construction, and real estate and rental and leasing industries.
Client-facing industries increased output in June following the easing of borders as well as the reduction of public health measures. This included the suspension of vaccine mandates for passengers traveling within Canada, the pausing of random testing for fully vaccinated international travelers, and in Ontario, the masking requirements were dropped in high-risk settings in June. Both the accommodation and food services and the arts, entertainment and recreation industries increased in June, with both sectors rising 1.8 per cent.
Transportation and warehousing increased for the fifth consecutive month, up 0.1 per cent in June, In Vaughan, transportation accounted for $1.16 billion in economic output and employed more than 15,500 workers in 2021.
LOCAL TRENDS, INVESTMENTS, AND SUCCESS STORIES
Small Business and Entrepreneurship sees demand for consultations driven by Accommodation & Food Services, Retail Trade, and Professional, Scientific & Technical Services in August
ED’s Small Business and Entrepreneurship top five industries seeking consultations in August were:
- Accommodation & Food Services (33%)
- Retail Trade (31%)
- Professional, Scientific & Technical Services (12%)
- Information & Cultural Industries (6%)
- Other Services (Except Public Administration) (6%)
Vaughan-headquartered SpaceRyde’s profile continues to grow following its grand opening in June
Vaughan-headquartered Spaceryde, Canada’s first private rocket company and the first company to offer affordable taxi rides for satellites and cargo to space, continues to be profiled following their grand opening in June.
Vaughan’s aerospace and aviation cluster employs more than 600 people within the City, and includes companies such as Merco Industries Ltd., Norcanco Inc., Discovery Precision Machining Inc., and Dishon Ltd.
Trillium Network for Advanced Manufacturing highlights Vaughan-based Prodevco Robotic Solutions
Economic Development has partnered with the Trillium Network for Advanced Manufacturing to promote Vaughan’s manufacturing industry by profiling local companies. Trillium is a provincially-funded non-profit organization dedicated to raising awareness of Ontario’s advanced manufacturing ecosystem.
The follwing profile was recently completed: