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Hamilton’s economy grows in 2022 but expected to slow going into 2023

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Despite solid GDP growth in 2021 with the easing of public health measures tied to COVID-19, a not-for-profit think tank says Hamilton’s economic activity continued to grow in 2022, but is beginning to slow.

The Conference Board of Canada’s (CoC) latest edition of their Major City Insights forecast is attributing a forthcoming decline with inflationary pressures, rising interest rates, supply chain issues and many industries facing labour shortages.

CoC economist Viktor Cicman told Global News he expects Hamilton’s GDP to grow to 3.0 per cent this year, but slow to around 2.2 per cent over each of the next two years.

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“Going into the tail end of this year … we’re starting to see growth slow down,” Cicman said.

“Interest rates are going up, helping to cool the economy down so that inflation can get back to a normal 2.0 per cent, and that’s where we see a slowdown happening nationwide. Most municipalities will see it.”

The city’s employment numbers for 2021 recouped 23,000 of the more than 26,000 jobs lost in 2020.

As of July 2022, the city’s unemployment rate is still hovering around a historic low, at 4.3 per cent.

Despite the gains in employment, labour shortages will continue to be an issue for restaurants, hospitality, and recreation, the CoC says.

The “strength” industries going into 2023 are expected to be in the city’s manufacturing, health care and professional services.

Cicman suspects some of the best growth rates will be within the health sector which has become a key cluster of development in Ontario following the pandemic.

“We’re still in a pandemic, we have an aging population … so there’s still going to be a lot of jobs that occur in health care especially since there’s (staff) shortages,” he said.

Growth with hotels, tourism and eateries is expected going into 2023 but the CoC forecast is not insinuating it will be easy for the sectors which appear to be suffering the brunt of labour issues.

“A lot of places that do these contact services … they’re having a hard time finding people” Cicman said. “They’re having to cut back on the amount of hours that are available. At the same time costs are going up for them and profit margins are very tight.”

The CoC’s outlook for the country suggests Saskatoon will outpace all other major cities in GDP growth making up for an eight-year GDP slump that saw the number 4.7 per cent lower in 2020 than it had been in 2014.

The cooling housing market will impact economic growth in Vancouver, Victoria and Québec City which will see lower but still healthy economic growth year over year with GDP rates of 2.5 to 2.8 per cent.

Cicman says housing is also expected to be key in Ontario’s future economic health, particularly with Statistics Canada revealing international migration accounted for 94.5 per cent of an estimated 285,000 new residents that arrived between April and July 2022.

“This does seem to be on the agenda for the Ford government and for a lot of mayors,’ Ciman explained.

“More housing will need to be built, especially as we do expect immigration to increase … with a lot of people coming to the GTA area and Hamilton.”

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Key White House economic advisor says U.S. economy is slowing but resilient – CNBC

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The U.S. economy is showing “continued resilience” despite a predictable slowdown, a top White House economic advisor said Wednesday.

National Economic Council Director Brian Deese said low rates of credit card delinquency and mortgage concerns point to resiliency in household balance sheets, while the labor market and the savings rate also indicate steadier growth. What’s more, he pointed to slowing inflation as a positive sign for healthier economic growth.

“We need to see a transition to a more stable growth trajectory, but I think if you look at the key elements that you need as part of that, some easing on the inflation side … we’re starting to see some evidence in that direction,” Deese said Wednesday on CNBC’s “Squawk Box.”

The November labor market report released Friday showed job growth was better than expected, as nonfarm payrolls increased by 263,000. The unemployment rate was 3.7%.

White House economic adviser Brian Deese speaks during a press briefing at the White House in Washington, March 31, 2022.
Kevin Lamarque | Reuters

The Federal Reserve has steadily raised interest rates in an effort to bring down the highest inflation in 40 years, contributing to concerns about a coming recession. The improving labor market, combined with a 0.6% increase in average hourly earnings last month, also has put pressure on the central bank to continue raising rates.

The Fed’s benchmark overnight borrowing rate reached a target range of 3.75%-4% after six consecutive hikes this year. Major U.S. stock indexes have struggled this week, in part due to concerns of a slowing economy and expectations of more rate increases ahead.

The Fed is expected to hike rates again at its meeting next week.

Despite the concerns felt by investors, economic resilience will position the U.S. to become a center of “investment, productivity and innovation” over the next few years, Deese said.

“We were out in (Phoenix) yesterday with a set of CEOs who all underscored this, that even as we’re looking at this transition and navigating through this historically unique transition, the United States looks better as a prospect to invest, and that’s going to be a driver,” Deese said. “That’s going be where we get our innovation and our productive capacity, beyond the next month or two.”

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U.S. Business Executives Sentiment on the Strength of the Canadian Economy Weakens – Canada NewsWire

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TORONTO, Dec. 7, 2022 /CNW/ – The American Chamber of Commerce in Canada (AMCHAM Canada) today announced the results of the ‘AmCham-Nanos American Investment in Canada Index (ANAIC Index),’ conducted by Nanos and presented by PNC Bank. The semi-annual study suggests that U.S. business executives’ sentiment on the Canadian economy is at an all-time low.

The report notes red tape or regulatory uncertainty (65%), followed by monetary policy, costs, rising interest rates and inflation (50%) and labour shortages (35%) are their top concerns for conducting business in Canada. However, sentiment regarding Canada’s business investment environment continues to track upwards – in fact, it’s up 11 points since April 2021.

“In addition to growing concerns around regulatory uncertainty, monetary policy and labour, nearly 50% of participating U.S. business executives predict the Canadian economy is moving in the wrong direction,” said David Olsen, regional president for PNC Bank in Canada and chair of AmCham Canada. “In the current environment, it has never been more critical to provide companies that operate within the U.S. and Canada with the insights and advice they need to make smart business and financial decisions.”

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The research also shows a decline in sentiment on the outlook of the Canadian economy with participating U.S. business executives eight times more likely to say that the Canadian economy will become weaker (66%) rather than stronger (8%) in in the next six months. The proportion of participants who think it will become weaker represents a significant increase of 42 percentage points since the last wave of research in Dec. 2021 and is at an all-time high since tracking started.

About four in 10 U.S. business executives in Canada (42%) report an increase in their sales in Canada in the past six months, a noticeable decrease since Dec. 2021 (58%). Despite that decrease and the declining sentiment on the outlook of the Canadian economy, about one in two participating U.S. business executives (53%) still expect an increase in their sales in Canada over the next six months.

“While regulatory red tape and labour shortages continue to be top concerns of conducting business in Canada, concern over inflation and monetary policy has also become top of mind for participating U.S. business executives,” said Nik Nanos chief data scientist and founder of Nanos Research. “The Amcham-Nanos American Investment in Canada Index (ANAIC Index) fell 19 points since the last wave in December 2021, reaching an all-time low since tracking started.”

The AmCham Canada-Nanos Research ‘American Investment in Canada Index,’ presented by PNC Bank, provides a semi-annual measure of business sentiment among U.S.-owned businesses operating in Canada. The purpose of the initiative is to gauge the business and investment climate in Canada from the perspective of executives leading American enterprises in Canada.

Wave six of the findings are based on an online survey between Sept. 13 and Oct. 12, 2022, of 38 senior executives from U.S. businesses operating in Canada representing a combined total global revenue of $1.2T CAN and a total combined Canadian revenue of $41.7B CAN. The full report with data tables can be found at www.amchamcanada.ca or www.nanos.co.

SOURCE American Chamber of Commerce in Canada

For further information: Nik Nanos, Chief Data Scientist and Founder, Nanos Research, Ottawa (613) 234-4666 ext. 237, [email protected]; Christina Figg, Media Relations, PNC Bank, (214) 871-1259, [email protected]; Andrea van Vugt, National Strategy Director, AmCham Canada, (613) 618-8841, [email protected]

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Mint issues black-ringed toonie in memory of Queen Elizabeth II

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Mint issues black-ringed toonie in memory of Queen Elizabeth II

The Royal Canadian Mint is issuing a new black-ringed toonie to honour Queen Elizabeth II.

The mint says the coin’s black outer ring is intended to evoke a “mourning armband” to honour the queen, who died in September after 70 years on the throne.

The mint says it will start to circulate nearly five million of the coins this month, and they will gradually appear as banks restock inventories.

Aside from the black ring, the mint says the coin retains the same design elements of the standard toonie.

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Four different images of the queen have graced Canadian coins since 1953, when she was crowned.

The core of the commemorative toonie will feature the same portrait of the queen that has been in circulation since 2003, with a polar bear design on the other side.

“Queen Elizabeth II served as Canada’s head of state for seven decades and for millions of Canadians, she was the only monarch they had ever known,” Marie Lemay, president and CEO of the Royal Canadian Mint, wrote in a statement.

“Our special $2 circulation coin offers Canadians a way to remember her.”

The mint says it may produce more of the coins, depending on what it calls “marketplace needs”.

This report by The Canadian Press was first published Dec. 7, 2022.

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