Source: The Standard
After coming out of the pandemic with an economic growth of 5.5 per cent that ranked second in the country in 2022, Niagara’s economy is slowing and is back in line with the rest of the province and Canada for 2023 and 2024.
That was the message Blake Landry, Niagara Region’s manager of economic research and analysis, delivered to councillors on the planning and economic development committee last week.
Landry said data shows the region’s economic growth was at 1.3 per cent for 2023 and expected to rise 1.5 per cent for 2024 — positioning Niagara in the middle among major Canadian metropolitan areas.
“The year ahead is expected to be more difficult, particularly for younger and lower-income households, with concerns about the potential for rising unemployment and the potential for increasing costs of doing business,” Landry said as part of his regular updates on Niagara’s economy.
“We’re not quite there yet. It’s a possibility, and, while uncertainties persist, including the possibility of interest rate cuts and a stubborn level of inflation, many experts predict a gradual recovery with increased activity by the second half of 2024.”
Retail sales — an indicator Landry includes because it reacts quickly to changing economic conditions — are expected to grow 3.9 per cent, or by $300 million, by the second quarter of 2024.
They grew 27 per cent, from $6.03 billion in the second quarter of 2021 to $7.66 billion in the same quarter of 2022, likely because of heightened consumer spending after pandemic restrictions were lifted, Landry said.
“Pent-up discretionary income throughout the pandemic resulted in a lot of growth in retail sales values, but we saw that come down recently due to higher interest rates, meaning lower discretionary income and less spending on retail goods,” Landry said.
The report said Niagara’s benchmark housing peaked in 2022 at $790,800 locally and $1,049,900 provincially. However, by the end of 2023, housing prices fell 16.5 per cent in Niagara and 13.5 per cent in Ontario.
“We continue to see this decrease,” Landry said. “It’s good from an affordability perspective, but it’s also an indicator that there’s softening in the economy.”
Landry said Niagara’s real GDP per capita, a figure that measures the economic productivity in an area, was $36,891 in Niagara compared to $50,053 for Ontario in the second quarter of 2021.
In the second quarter of 2023, Niagara outperformed Ontario’s, 4.4 per cent to 1.6 per cent.
Niagara’s average salaries and wages were lower than Ontario’s — $52,428 locally compared to $60,583 provincially — in the second quarter of 2021. However, by the second quarter of 2024, average wages and salaries in Niagara are expected to close the gap somewhat, increasing by 8.4 per cent compared to 7.4 per cent for the province.
St. Catharines Coun. Laura Ip asked about the impact of poverty on people who are unhoused or under-housed and may have given up looking for work.
Landry called establishing employment metrics a dynamic process that changes month to month.
“Population increasing could affect the unemployment rate,” Landry said. “If more retirees move into the area, that affects our unemployment rate because they’re not participating in the labour force.”
With regard to poverty, Landry said a lack of data resources limits how deep a dive he can make.
“I want to show social stratification and that sort of thing, but I just don’t have the data resources to do it,” Landry said. “I really tried when we were working on the poverty reduction strategy, but it’s not possible with what’s available at the regional level.”
Income: Household disposable income per capita in Niagara is expected to grow by 1.6 per cent in 2024 while remaining stagnant across the rest of the province.
International trade: Data is only available annually, but in 2022, global trade reached $8.2 billion in Niagara, up 25 per cent from $1.6 billion in 2021.