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Waterloo Region economy expected to avoid recession, outpace provincial GDP



KITCHENER — Waterloo Region’s economy will avoid a recession in 2023 and outpace provincial economic activity for the year, according to a new report.

The Conference Board of Canada, an Ottawa-based think-tank, released its annual economic projections for the region this week, predicting a slowdown in the economy mostly due to national challenges including rising interest rates, a cooling housing market and the threat of a Canadian recession.

But while the region’s output is slowing, it is still expected to outpace the provincial economy.

After a red-hot 2021 and 2022, the region’s gross domestic product growth is expected to slow to 1.5 per cent in 2023, jumping back up to 3.5 per cent in 2024 and 2.4 per cent in 2025.

That’s above the projections for Ontario, with the provincial government forecasting growth around 0.5 per cent in 2023, 1.6 per cent in 2024 and 2.1 per cent in 2025.

Over the last two decades, the region has been one of the province’s economic engines, with its economy expanding faster than the province’s in 18 of the last 21 years.

“It isn’t a surprise to me that Kitchener and surrounding area is expected to outpace the provincial economy throughout our forecast,” said Robin Wiebe, an economist with the conference board who is originally from Kitchener. “It is a vibrant community with an economy with multiple sectors, and it has a history — at least over the last 21 years — of outperforming the province.”

The regional government also has a favourable projection for the area, with spokesperson Scott Cressman noting the low industrial vacancy rate, steady construction activity, and ability to draw workforce talent as reasons for optimism.


“The Region of Waterloo’s diversified economy has allowed for ongoing growth in the Waterloo Region, enabling us to be fairly optimistic about the projection,” said Cressman.

Manufacturing, which makes up 18 per cent of the region’s economy, is expected to return to pre-pandemic levels by 2024.

And while tech layoffs may temporarily hinder the region’s tech sector, continued unfilled job openings should mean local laid-off employees can quickly find new work.

“I think what this reporting is highlighting is the importance of our diverse economy,” said Art Sinclair, vice-president of the Greater Kitchener Waterloo Chamber of Commerce.

“After the early impact of the pandemic, what we’re seeing is we’re moving back to original pre-pandemic conditions, where we were a consistent economic driver of the province.”

Despite a potential slowdown in the year ahead, Sinclair said a top concern for local employers remains finding workers.

The region’s unemployment rate stood at 5.5 per cent in 2022, down considerably from 9.6 per cent in 2020 and 6.5 per cent in 2021.

It is expected to reach about 5.8 per cent in 2023.

But the report highlights other possible headwinds that could limit the projected growth for the region.

Real estate prices are forecast to continue dropping in 2023 after the frenzy between 2020 and 2022.

According to new monthly statistics from the Waterloo Region Association of Realtors, the average price for all property types in the region is to $758,698. That’s down about 25 per cent from the February 2022 peak of $1,012,930.

“That could be made worse if there is a change in direction with Toronto companies and their work-from-home models,” said Wiebe. “If there is a mass return to the office in Toronto, that could put an end to the large amounts of people fleeing the city, and cause prices to drop even further.”


The region also continues to take in a large share of new immigrants, he said, expected to fuel the region’s growth over the next three years. He expects the population will grow by 2.4 per cent in 2023, followed by 1.8 per cent in 2024 and 1.7 per cent in 2025.

“I think the one area for concern for the region is that it likely can’t keep growing forever without having some hiccups,” said Wiebe.

“They likely won’t be able to build housing quick enough to meet the population demands, and there’s also the impact on existing infrastructure and services from these increased numbers.”

There’s also one other major consideration that could upend all future regional projections.

If the country moves into a full-blown recession, he said, the region will not be immune, and the conversation could soon turn from one of optimism to one of desperation.

Key Waterloo Region economic projections:

  • The population will grow by 2.4 per cent in 2023, 1.8 per cent in 2024 and 1.7 per cent in 2025.
  • The local GDP grew by a 21-year high of 5.1 per cent in 2021 and expanded a further four per cent in 2022.
  • Forecasts indicate local GDP growth of 1.5 per cent in 2023, 3.5 per cent in 2024 and 2.4 per cent in 2025.
  • The unemployment rate will increase to 5.8 per cent in 2023 from 5.5 per cent in 2022. Both are down considerably from 9.6 per cent in 2020 and 6.5 per cent in 2021.
  • For all of 2022, employment rose by 10,700 jobs — an increase of 3.3 per cent — to a record 332,140. This followed a 2021 increase of 15,250 jobs, or five per cent.


  • Overall employment is expected to increase by one per cent in 2023, led by gains of 4,250 jobs in finance, insurance, and real estate; and 3,300 jobs in manufacturing.

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Theo Argitis: Taking stock of Canada’s complicated economy before tomorrow’s Bank of Canada decision – The Hub



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Theo Argitis: Taking stock of Canada’s complicated economy before tomorrow’s Bank of Canada decision  The Hub


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Here is Trump economy: Slower growth, higher prices and a bigger national debt



If Donald Trump is re-elected president of the United States in November, Americans can expect higher inflation, slower economic growth and a larger national debt, according to economists.

Trump’s economic agenda for a second term in office includes raising tariffs on imports, cutting taxes and deporting millions of undocumented migrants.

“Inflation will be the main impact” of a second Trump presidency, Bernard Yaros, lead US economist at Oxford Economics, told Al Jazeera.

“That’s ultimately the biggest risk. If Trump is president, tariffs are going up for sure. The question is how high do they go and how widespread are they,” Yaros said.

Trump has proposed imposing a 10 percent across-the-board tariff on all imported goods and levies of 60 percent or higher on Chinese imports.

During Trump’s first term in office from 2017 to 2021, his administration introduced tariff increases that at their peak affected about 10 percent of imports, mostly goods from China, Moody’s Analytics said in a report released in June.

Those levies nonetheless inflicted “measurable economic damage”, particularly to the agriculture, manufacturing and transportation sectors, according to the report.

“A tariff increase covering nearly all goods imports, as Trump recently proposed, goes far beyond any previous action,” Moody’s Analytics said in its report.

Businesses typically pass higher tariffs on to their customers, raising prices for consumers. They could also affect businesses’ decisions about how and where to invest.

“There are three main tenets of Trump’s campaign, and they all point in the same inflationary direction,” Matt Colyar, assistant director at Moody’s Analytics, told Al Jazeera.

“We didn’t even think of including retaliatory tariffs in our modelling because who knows how widespread and what form the tit-for-tat model could involve,” Colyar added.

‘Recession becomes a serious threat’

When the US opened its borders after the COVID-19 pandemic, the inflow of immigrants helped to ease labour shortages in a range of industries such as construction, manufacturing, leisure and hospitality.

The recovery of the labour market in turn helped to bring down inflation from its mid-2022 peak of 9.1 percent.

Trump has not only proposed the mass deportation of 15 million to 20 million undocumented migrants but also restricting the inflow of visa-holding migrant workers too.

That, along with a wave of retiring Baby Boomers – an estimated 10,000 of whom are exiting the workforce every day – would put pressure on wages as it did during the pandemic, a trend that only recently started to ease.

“We can assume he will throw enough sand into the gears of the immigration process so you have meaningfully less immigration, which is inflationary,” Yaros said.

Since labour costs and inflation are two important measures that the US Federal Reserve weighs when setting its benchmark interest rate, the central bank could announce further rate hikes, or at least wait longer to cut rates.

That would make recession a “serious threat once again”, according to Moody’s.

Adding to those inflationary concerns are Trump’s proposals to extend his 2017 tax cuts and further lower the corporate tax rate from 21 percent to 20 percent.

While Trump’s proposed tariff hikes would offset some lost revenue, they would not make up the shortfall entirely.

According to Moody’s, the US government would generate $1.7 trillion in revenue from Trump’s tariffs while his tax cuts would cost $3.4 trillion.

Yaros said government spending is also likely to rise as Republicans seek bigger defence budgets and Democrats push for greater social expenditures, further stoking inflation.

If President Joe Biden is re-elected, economists expect no philosophical change in his approach to import taxes. They think he will continue to use targeted tariff increases, much like the recently announced 100 percent tariffs on Chinese electric vehicles and solar panels, to help US companies compete with government-supported Chinese firms.

With Trump’s tax cuts set to expire in 2025, a second Biden term would see some of those cuts extended, but not all, Colyar said. Primarily, the tax cuts to higher earners like those making more than $400,000 a year would expire.

Although Biden has said he would hike corporate taxes from 21 percent to 28 percent, given the divided Congress, it is unlikely he would be able to push that through.

The contrasting economic visions of the two presidential candidates have created unwelcome uncertainty for businesses, Colyar said.

“Firms and investors are having a hard time staying on top of [their plans] given the two different ways the US elections could go,” Colyar said.

“In my entire tenure, geopolitical risk has never been such an important consideration as it is today,” he added.



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China Stainless Steel Mogul Fights to Avoid a Second Collapse



Chinese metal tycoon Dai Guofang’s first steel empire was brought down by a government campaign to rein in market exuberance, tax evasion accusations and a spell behind bars. Two decades on, he’s once again fighting for survival.

A one-time scrap-metal collector, he built and rebuilt a fortune as China boomed. Now with the economy cooling, Dai faces a debt crisis that threatens the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry Co., along with plants held by his wife and son. Its demise would send ripples through the country’s vast manufacturing sector and the embattled global nickel market.



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