TD Bank, Whitby Chamber of Commerce and Town of Whitby collaborated to deliver the TD Economic Update for the business community in October 2021. For the second straight year the event was held virtually. Derek Burleton, Vice President and Deputy Chief Economist at TD Bank walked us through some economic indicators that will shape Canada’s recovery. Here were my key learnings.
- We remain in uncertain times – Canada and other countries aren’t out of the woods yet. We’re learning to live with the virus. Advanced economies are recovering faster than emerging markets. These economies are also ahead in terms of vaccination rates. Much of the GDP growth in 2021 was in construction and public sector services. Expect a strong rebound in 2022 for manufacturing and other services where there are high touch points.
- Supply side constraints will continue into 2022 – Our economy is going to have to work through supply side constraints for goods movement over the next one to two years. The 24/7 operation of ports will help service the back log of goods. Consumers have also delayed some their purchasing because of the lack of supply for goods.
- Blame COVID-19 for the shortage of semi-conductors – This shortage is due to manufacturing plant closures. There is a lag in servicing the demand for semi-conductors for electronic equipment.
- Labour market recovery has been strong – Canada’s labour market recovery is ahead of the U.S. There was also a lot of volatility in wages last year, but much of this volatility has tapered back to a wage growth rate of 3-4 percent. Expect a tight labour market in Canada. Much of our labour force growth is driven by immigration growth.
- Housing market is cooling – The housing market is cooling, but prices remain elevated. Average home prices are being adjusted, but affordability continues to erode in Canada. Public policies to ban foreign investment in housing and taxing people who sell within one year with capital gains are measures to improve affordability.
This event is held annually each fall. Great economic content continues to be delivered by Derek. Hopefully, next fall we can do this collaborative event in person. Make sure to check out the Chamber’s events page for this event in 2022.