Economic and Investment Update – May 2022
- The Consumer Price Index (CPI) continues to rise, increasing slightly from the previous month to 6.8 per cent year-over-year in April
- National unemployment rate for core working-age people (aged 25 to 54) at lowest recorded rate since 1976
- Real Gross Domestic Product (GDP) increases in March, led by client-facing industries
- Ontario leads manufacturing sales increase in March with motor vehicle sales increasing to highest level since November 2020. 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, Retail Trade, and Accommodation & Food Services in April
- Vaughan-headquartered PSP Services Inc. completes acquisition of PSiGate to expand offerings in eCommerce solutions
- Vaughan Social Innovation Challenge winner Able Innovations secures a total of $7.5 million in funding after raising $2.5 million in seed extension in March
- Vaughan-headquartered York1 acquires United Environmental Holdings Inc., increasing York1’s network of waste and recycling processing facilities in Ontario to ten
- Vaughan-headquartered GFL Environmental Inc. acquires U.S.-based Sprint Waste Services to expand southern U.S. footprint
SELECT Economic Indicators
The Consumer Price Index (CPI) continues to rise, increasing slightly from the previous month to 6.8 per cent year-over-year in April
The Consumer Price Index (CPI) rose 6.8 per cent on a year-over-year basis in April. In Ontario, prices increased 6.9 per cent in April year-over-year, but grew at a slower pace than in March which had seen a 7 per cent increase.
Grocery prices continue to rise, with Canadians paying 9.7 per cent more in April for food purchased from stores compared to the same time period last year. This marks the fifth month in a row of increases exceeding 5 per cent, with April seeing the largest increase since September 1981. From 2010 to 2020, there were only five months in the decade where groceries increased at 5 per cent or higher.
Rising food prices can be contributed to multiple events: geo-political tensions between Russia and Ukraine putting upward pressure on products that use wheat, poor weather in growing regions, and higher prices for inputs required to produce food for farmers who have passed some of these costs on to consumers.
Rent prices continue to rise nationally, increasing 4.5 per cent in April compared to the same time period the previous year. Canada’s most populous provinces drove this increase – Ontario’s rent prices increased 5.3 per cent in April compared with the same month last year.
In April, average hourly wages for employees rose 3.3 per cent on a year-over-year basis. On average, Canadians continue to experience a decline in purchasing power as prices rose faster than wages.
National unemployment rate for core working-age people (aged 25 to 54) at lowest recorded rate since 1976
Unemployment edged down slightly to 5.2 per cent in April nationally, the lowest level since data became available in 1976. In Ontario, unemployment rose slight to 5.4 per cent, while the Toronto Census Metropolitan Area (CMA) – which includes Vaughan – maintained a higher unemployment rate than both Canada and Ontario, increasing slightly to 6.4 per cent.
Unemployment rose slightly in Ontario in April, with youth unemployment (aged 15 to 24) maintaining the highest unemployment rate at 11.2 per cent. Unemployment dropped for adult women (25 years and over) to 4.9 per cent, rising slight for adult men from 3.7 per cent to 4.1 per cent.
Nationally, unemployment among core working-age people (25 to 54) fell 0.2 percentage points to 4.3%, the lowest recorded rate since comparable data became available in 1976. The unemployment rate among older adults changed very little; women aged 55 to 64 fell to 4.4 per cent, while the rate for men at 5.5 per cent was little changed. Based on the results of the 2021 Census, Canada faces record retirements, with more than 1 in 5 people of working age being aged 55 to 64. Looking ahead to the coming years, particularly given the tight labour market conditions, the labour force participation rate of older adult may play a key factor in balancing labour supply and demand.
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. The share of employees working at home, both fully or in a hybrid arrangement in the Toronto CMA remained high, at 35.1 per cent in April.
Real Gross Domestic Product (GDP) increases in March, led by client-facing industries
Real Gross Domestic Product (GDP), which measures the inflation-adjusted value of goods and services produced in the economy, increased by 0.7 per cent in March. This represents the tenth consecutive month of growth as measured by economic output.
Manufacturing continued to rise in March for the sixth consecutive month, increasing by 0.9 per cent and surpassing pre-pandemic level of activity. The construction sector expanded 1.2 per cent, reaching an all-time high and surpassing the highest level of output previously seen in April 2021.
Wholesale trade and retail activity both saw declines in March. Wholesale trade contracted 0.7 per cent, declining for the third consecutive month. Retail trade contracted for the second month in a row, declining 0.6 per cent. However, excluding motor vehicle and parts dealers, retail trade rose across many subsectors, rising 0.7 per cent.
Tourism-related industries saw continued increases in real GDP in March, with accommodations and food services increasing by 10.9 per cent in March. Food services and drinking places drove the increase, growing 8.5 per cent in March. Accommodation services also increased, rising 17.3 per cent in March. Amusement, gambling and recreation industries increased by 14.7 per cent, and performing arts, sports and related industries, and heritage institutions grew by 11.9 per cent.
Advance information indicates that real GDP increased 0.2% in April. Increases in output are noted in the mining, quarrying and oil and gas, transportation and warehousing, and wholesale trade sectors. Notable decreases were recorded in the real estate and rental and leasing, finance and insurance, manufacturing and construction sectors
Ontario leads manufacturing sales increase in March with motor vehicle sales increasing to highest level since November 2020
Manufacturing sales rose 2.5 per cent to $70.2 billion in March. Sales in constant dollars remained unchanged, indicating this increase was driven by higher prices.
In Ontario, sales in March totalled $30.1 billion, increasing 2.4 per cent following a 6.6 per cent increase in February. Increases were largest in the petroleum and coal (up 10.3 per cent) motor vehicle (up 5.2 per cent) and motor vehicle part (up 6.8 per cent) industries. Sales of motor vehicles in Ontario increased to their highest level since November 2020, and exports of motor vehicles and parts rose by 7.9 per cent in March, despite the ongoing global shortage of semiconductor parts.
The Toronto CMA, which includes Vaughan, posted a 2.5 per cent increase to $11.7 billion in sales in March. Year-over-year, Toronto CMA saw an increase of 18.9 per cent over March 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, Retail Trade, and Accommodation & Food Services in April
ED’s Small Business and Entrepreneurship top five industries seeking consultations in April were:
- Professional, Scientific & Technical Services (47%)
- Retail Trade (21%)
- Accommodation & Food Services (15%)
- Transportation and Warehousing (9%)
- Arts, Entertainment & Recreation (9%)
Vaughan-headquartered PSP Services Inc. completes acquisition of PSiGate to expand offerings in eCommerce solutions
PSP Services Inc., headquarted in Vaughan, acquires Payment Services Interactive Gateway Inc. (PSiGate) to further deliver on mobile and ecommerce solutions for merchant through PSiGate’s proprietary gateway. PSP Services Inc. is one of the country’s largest bank-independent payment processors and a leader in payment systems, processing, and integrations, offering centralized, data-rich and multi-channel insights for businesses to optimize operations.
York Region is home to Ontario’s second-largest Finance and Professional Services Industry Cluster, with more than 6,500 businesses employing more than 75,000 workers – this included more than 50 fintech companies.
Vaughan’s Finance, Insurance and Real Estate accounted for $5 billion in local economic output as measured by real GDP and employed nearly 21,500 workers in 2021 and was home to 640 firms in the Finance and Insurance sector.
Vaughan Social Innovation Challenger winner Able Innovations secures a total of $7.5 million in funding after raising $2.5 million in seed extension in March
Able Innovations secures a total of $7.5 million in funding following a $2.5 million seed extension in March. Able Innovations March seed extension ensures it will deliver units to those piloting their devices, leveraging these pilots to grow manufacturing operations. Able Innovations is a robotic medical device startup focusing on the problem of patient transfer. Able Innovations was a winner during the second Vaughan Social Innovation Challenge. Vaughan received an International Economic Development Council (IEDC) silver award in the Innovation Programs and Initiatives category in 2019 for its Social Innovation Challenge program.
Vaughan-headquartered York1 acquires United Environmental Holdings Inc., increasing York1’s network of waste and recycling processing facilities in Ontario to ten
York1, a Vaughan-headquartered leading provider of environmental and infrastructure services, acquired Toronto-based United Environmental Holdings Inc. to further support its growth strategy. United Environmental Holdings Inc. is a leading solid waste service provider, specializing in industrial, commercial and institutional waste sectors. This acquisition brings York1’s waste and recycling processing facilities to ten in Ontario.
Vaughan-headquartered GFL Environmental Inc. acquires U.S.-based Sprint Waste Services to expand southern U.S. footprint
GFL Environmental Inc. acquired Sprint Waste Services in May 2022, expanding their reach in the Southern U.S. and bringing in an additional 400 vehicles and 500 more employees. GFL Environmental Inc., headquartered in the Vaughan Metropolitan Centre, is the fourth largest North American diversified environmental services company with a platform of facilities across Canada and in more than half of the U.S. states. Across its organization, GFL has a workforce of more than 18,000 employees.