Economic and Investment Update – October 2023
- The Consumer Price Index rose 4.0 per cent year over year in August following a 3.3 per cent increase in July.
- The national unemployment rate was unchanged, remaining at 5.5 per cent in September. Real Gross Domestic Product (GDP) remained unchanged in July following a 0.2 per cent decline in June.
- The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in professional scientific and technical services, retail trade, and other services in September.
- Novel Biotechnology announced $2.5 million of secured seed funding from the support of private investors and the Ontario Centre of Innovation.
- Vaughan is set to host the Automotive Parts Manufacturing Association’s (APMA) annual conference for the next three years beginning in 2024.
- Nine Vaughan companies listed in Canada’s Top Growing Companies of 2023.
- Legacy Supply Chain announces new omni-channel and e-commerce fulfillment expansion in Vaughan.
SELECT ECONOMIC INDICATORS
The Consumer Price Index rose 4.0 per cent year over year in August following a 3.3 per cent increase in July.
The Consumer Price Index (CPI) rose 4.0 per cent year-over-year in August following a 3.3 per cent year-over-year increase in July. Headline acceleration in CPI was largely due to increased year-over-year prices in gasoline, energy, and mortgage interest. On a monthly basis, CPI increased 0.4 per cent in August following a 0.6 per cent increase in July. The slowdown in monthly increases in CPI was driven by decreases in costs of travel tours and air transportation as prices typically fall following the peak of summer travel demand in July.
Gasoline prices increased for the first since January 2023 due to higher global oil production and lower refining margins. On a monthly basis, gasoline prices rose 4.6 per cent further contributing to the year-over-year increase in August 2023.
Mortgage interest costs and shelter prices are continuing to increase. Shelter costs rose 6.0 per cent on a year-over-year basis in August, with rents making up a considerable portion of this increase. Similarly, mortgage interest costs rose 30.9 per cent when compared to July’s increase of 30.6 per cent.
Food prices for groceries slowed in August but remained elevated. In August food purchased from stores rose 6.9 per cent compared to 8.5 per cent in July. Prices for fresh fruit, cereal products, and fresh or frozen chicken increased at a slower pace when compared to July, however when combined with an increase in the price of beef, coffee, tea, sugar and confectionery resulted in elevated prices.
The national unemployment rate was unchanged, remaining at 5.5 per cent in September.
National unemployment remained unchanged in September at 5.5 per cent. National employment rose by 64,000 in September following an increase of 40,000 (+0.2 per cent) in August. Employment increases are still mainly attributed to the country’s highest population growth since 1957.
Ontario’s unemployment rate rose 0.1 per cent in September to 6.0 per cent, while unemployment in the Toronto Census Metropolitan Area (CMA) – which includes Vaughan – remained at 6.5 per cent for the second consecutive month.
Employment gains in September were concentrated in educational services, transportation and warehousing while declines were noted in construction, finance insurance and real estate, rental and leasing and information culture and recreation industries.
Employment growth in September was primarily driven by part-time work. Since the beginning of the year, growth in part-time (+1.9 per cent) has outpaced growth in full-time work (1.0 per cent). As part time work may be voluntary or involuntary, the involuntary part-time rate (the proportion of people working less than 30 hours a week) stood at 17.5 per cent and was higher than the involuntary part-time work rate during the same month in 2022.
On a year-over-year basis, average hourly wages rose 5.0 per cent (+$1.63 to $34.01) in September, following increases of 4.9 per cent in August and 5.0 per cent in July.
Real Gross Domestic Product (GDP) remained unchanged in July following a 0.2 per cent decline in June.
Real Gross Domestic Product (GDP) remained unchanged in July, following a 0.2 per cent increase in June. Real GDP measures the inflation-adjusted value of goods and services produced in the economy and is an indicator of economic growth.
Manufacturing and the transportation and warehousing sectors both experienced declines in July. Manufacturing had the largest negative contribution to GDP in July declining 1.5 per cent, this was mainly due to issues with lower inventory formation and port strikes in British Columbia negatively impacting the chemical manufacturing subsector. The transportation and warehousing sector posted a decline of 0.2 per cent in July due to adverse weather and effects from forest fires which impacted several regions across the country.
Oil and gas extraction increased in July due to higher natural gas extraction, this caused a rise in GDP of 1.5 per cent, reporting an increase for the sixth time in the last seven months. Finance and insurance increased 0.3 per cent in July as buying activity on the equity market helped the Toronto Stock Exchange increase 2.3 per cent. Additionally, real estate and rental and leasing continued to grow slightly at 0.1 per cent in July continuing its growth since November 2022. Professional scientific and technical services reported is first contraction in eight months with an overall sector decrease of 0.2 per cent.
Advance information indicates that real GDP edged up 0.1 per cent in August. Increases in the wholesale trade and finance and insurance sectors were partly offset by decreases in the retail trade and oil and gas extraction sectors.
LOCAL TRENDS, INVESTMENTS, AND SUCCESS STORIES
The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in professional scientific and technical services, retail trade, and other services in September.
ED’s Small Business and Entrepreneurship top five industries seeking consultations in September were:
- Professional scientific and technical services (37 per cent)
- Retail trade (17 per cent)
- Other services (13 per cent)
- Health care and social assistance (11 per cent)
- Accommodation and food services (5 per cent)
Novel Biotechnology announced $2.5 million of secured seed funding from the support of private investors and the Ontario Centre of Innovation.
Vaughan-based Novel Biotechnology a synthetic biology company focused on developing highly productive plasma DNA manufacturing platforms recently announced $2.5 million in secured seed funding. Novel Biotechnology is dedicated to pioneering a groundbreaking platform technology for the production of plasmid DNA a critical reagent in the modern biopharmaceutical industry.
Vaughan is home to an extensive network of health and healthcare tech and life sciences. The sector comprises all aspects of health and healthcare from services to residents and business-led innovation, Vaughan is a hub and destination for excellence in healthcare and health innovation and is home to major life sciences and healthcare companies/facilities including: Cortellucci Vaughan Hospital, AB Sciex, Alexion, Allergen, argenx, Astellas, Bausch & Lomb, Johnson & Johnson, LGC, Canon Medical, Cardinal Health, Leo Pharma, Chepeid.
Vaughan is set to host the Automotive Parts Manufacturing Association’s (APMA)annual conference for the next three years beginning in 2024.
The APMA is set to hold its next three annual conferences in Vaughan. The annual conference brings together leaders across the automotive industry to drive innovation, collaboration and discuss the future of the industry. Vaughan’s automotive sector is comprised of more than 600 sector-related businesses employing nearly 14,000 people. The automotive sector in Vaughan makes up a large part of the advanced manufacturing cluster in the city contributing $4.0 billion in real GDP to Vaughan’s economy.
Nine Vaughan companies are listed in Canada’s Top Growing Companies of 2023.
Nine Vaughan-based companies were recently included in the Globe and Mails Canada’s Top Growing Companies of 2023. This list highlights public and privately owned companies that have experienced major three-year growth in revenue. Vaughan businesses include:
- Flourish Pancakes
- Stack Adapt
- Catanzaro Mechanical
- My Baskets
- Highlight Motor Group
- Fastfrate Group
- Solutions Stack
- Wyse Meter Solutions
- Mactrans Logistics
Legacy Supply Chain announces new omni-channel and e-commerce fulfillment expansion in Vaughan.
Legacy Supply Chain, a high-growth North American third-party logistics provider has recently announced the opening of a 141,000 square foot omni-channel fulfillment warehouse in Vaughan. Legacy Supply Chain is continuing to expand omni-channel distribution and fulfillment capacity in the US and Canada. The new facility is Legacy’s fourth in the GTA and will build on the company’s hope to establish an integrated network that enables omni-channel brands to deliver their products to end consumers.