The Canadian economy contracted 0.1 per cent in July following growth of 0.6 per cent in June.  The level of GDP remains about 2 per cent below its pre-pandemic level of February 2020.  The majority of Canadian industries actually grew in July, led by re-opening of many provincial economies which led to a strong increase in the accommodation and food services sectors. That strength was more than offset, however, by declines in agriculture, manufacturing and wholesale trade. On the bright side, Statistics Canada's preliminary estimate for August real GDP is showing a strong bounce back, with output across the economy rising 0.7 per cent on a monthly basis. 

Given today's release, we are tracking 3rd quarter real GDP growth in Canada at about 3.5 per cent. The pace of the recovery remains uncertain due to the pandemic and especially the Delta variant driven rise in cases around the country. We saw this uncertainty at play in the second quarter when the economy unexpectedly contracted and again, though to a lesser extent, in July. We anticipate that some of the expected acceleration of economic growth may now be pushed into the fourth quarter of 2021 and the first half of 2022. As a result, we have trimmed our forecast for Canadian real GDP growth from about 6 per cent in 2021 down to 5 per cent.

For more information, please contact: Gino Pezzani.

Link:  https://mailchi.mp/bcrea/canadian-monthly-gdp-growth

Working from home initially presented employees with many struggles, from child care to virtual meeting fatigue. But it has revealed a few upsides, according to a report from Microsoft. Among them: increased empathy for colleagues working from home (WFH).

Overall, 62% of 2,000 remote workers in six countries surveyed by Microsoft reported feeling more empathetic to their co-workers now that they have a better idea of what WFH is like. The response was highest in China, with 91% reporting high empathy, followed by Mexico (65%), the U.S. (61%), Italy (54%), and the U.K. (51%).

As fall approaches with wet weather, driving on slick, rainy roads can be treacherous. With so much time spent at home recently, a reminder of how to drive in wet conditions is a good idea. Follow this AAA-recommended advice for staying safe:

Plan ahead. Check weather and driving conditions before getting behind the wheel.

Keep a safe distance. Allow extra space for you to stop if a vehicle ahead of you stops or swerves suddenly. Slow down early before coming to intersections or stop signs.

Be patient. Traffic will be slower when rain is falling. Add in extra time to reach your destination so you don’t have to rush.

Turn headlights on. This doesn’t just help you see the road better— it makes you more visible to other drivers. However, avoid using high beams.

Drive slowly. Even at 35 mph, your tires can lose contact with the road, causing your vehicle to start hydroplaning. To stay in control, slow down, avoid sharp turns, and drive in the tracks of vehicles ahead of you.

Don’t use cruise control. Used in wet conditions, it can increase the risk of hydroplaning.

Eliminate distractions. As always, don’t text, talk, or do anything that takes your attention from the road.

In August, although sales and new listings ticked up slightly from July, the COVID-19 Recovery Dashboard indicates that BC housing markets are continuing their trend of calming relative to peaks in March. The seasonally adjusted six-month moving-average for housing starts hit a record level in the province for a third consecutive month, a positive sign amid housing supply shortages. Rents are also beginning to rise sharply in major centers across the province. Although rents were unchanged in Vancouver from July, they remain elevated.

Retail sales declined slightly from June but continue to post strong figures, with July sales 9 per cent above the same month last year. After recovering over the summer, restaurant reservations have declined sharply in Toronto, Montreal, and Vancouver in September as additional health restrictions were implemented. Google’s average measure of movement trends in BC have also softened somewhat since the start of September and remain about 13 per cent below the pre-pandemic baseline.

Seasonally adjusted aggregate employment in BC is close to pre-pandemic levels, although high-wage workers are still doing much better than low-wage workers and sectors like food and accommodation continue to lag. Manufacturing sales in BC were down 8.6 per cent in July on lower sales of wood, primary metal and paper products but were still up 20.4 per cent year over year. Imports and exports also contracted in July after hitting record levels in June for a second consecutive month. Consumer confidence contracted in August but is trending towards pre-pandemic levels, while business confidence is well above pre-pandemic levels.

For a more comprehensive overview of BC's economic recovery, click here. here. 

BCREA's updated COVID-19 Recovery Dashboard is available here. 

For more information, please contact: Gino Pezzani.

Americans are taking extra steps (get it?) to ensure they stay physically fit these days. The Pew Research Center reports that 21% of U.S. adults wear a smart watch or some other kind of fitness tracker to monitor their physical activity - 18% of men and 25% of women.

Many fitness apps allow the data they collect to be shared with health researchers, which raises privacy concerns for some. Still, 41% of Americans feel it’s acceptable to use information to research the link between exercise and heart disease, as opposed to 35% who disagree, and 22% aren’t sure.

Among people who actually use a fitness tracker, 53% agree that sharing is acceptable, but only 38% of those who don’t use trackers say the same.

Despite the reopening of retail outlets across the country as health restrictions eased, Canadian seasonally-adjusted retail sales declined 0.6% to $55.8 billion in July. The overall decline was driven by drops in sales at food and beverage stores (-3.4%) and building material and garden equipment and supplies dealers (-7.3%). According to Statistics Canada's survey, just 0.5% of retailers were closed at some point in July. Preliminary estimates, based on roughly 50% of respondents reporting so far to the agency, indicate that retail sales rose 2.1% in August. 

In BC, sales declined 1.2% after hitting record levels in the prior two consecutive months. Compared to the same month last year, retail sales were up 9.1% in the province. Only food and beverage store sales and health and personal care sales were not up on a year-over-year basis in July. In the Greater Vancouver region, sales dropped by 2.7% month-over-month, but were up 14.9% year-over-year. 

In July, Canadian e-commerce sales declined sharply from $3.9 billion to $2.9 billion dollars. As a result, e-commerce declined from 6.2% of total retail sales in June to 4.6% in July. This decline occurred as health restrictions eased across the country and Canadians shifted to brick-and-mortar retail. 

Link:  https://mailchi.mp/bcrea/canadian-retail-sales-july-2021

For more information, please contact: Gino Pezzani.

Did you know that September 21st is International Gratitude Day?

I know that I’m certainly grateful for having autumn arrive with cool winds. The nights aren’t quite as warm as they were even a few weeks ago, and stores have already begun stocking everything pumpkin related.

I’m also grateful for something much more traditional as so many people go back to school in the fall: teachers. 

I am appreciative of all the teachers who turn up throughout the course of our lives. Those unexpected teachers come out of nowhere and change us forever. They are the elderly ladies with time to chat, the child who surprises us with insight that most adults overlook, and the average person who takes the time to explain a process, that is specific to their field of expertise, in common terms.

Who are the unexpected teachers in your life? Have you told them that they positively changed you, irrevocably, by teaching you something new? Perhaps this would be a good week to share your gratitude.

A simple card, an unexpected phone call, or even an email would likely be much appreciated by a teacher who made a difference at some time in your life. It might just lead to a larger conversation and a deeper friendship. If nothing else, you made someone’s day with a positive comment by simply expressing your gratitude. After all, one of the first things that we are taught in preschool or kindergarten is to say, “thank you”.

Click here to view the September 2021 Mortgage Rate Forecast. 

It was another quiet quarter in the Canadian mortgage market. Canadian five-year fixed rates moved essentially sideways over the summer as optimism about the end of the pandemic faded under the weight of a fourth wave of cases. Canadian economic growth remains strong, if uneven, and inflation continues to be elevated. However, global financial market attention has entirely shifted from concerns over rising inflation to fears over the impact of the delta variant of COVID-19. Indeed, rising cases across G7 countries has prompted a retracing of bond yields with the Canadian five-year Government of Canada bond falling from about 1 per cent in June to 0.8 per cent in September. That decline in bond yields prompted a modest five basis point cut in mortgage rates by major Canadian lenders.

Given that the direction of interest rates is being determined by epidemiologic factors rather than macroeconomics, it is difficult to forecast with any certainty. It is perhaps more likely in the short-term that five-year fixed rates will decline further, at least until we are past this most recent uptick in COVID-19 cases. Once normal macroeconomic drivers again take precedence in determining mortgage rates, whenever that might be, we expect fixed rates to gradually rise back to pre-pandemic levels while variable rates follow the Bank of Canada’s timetable. That means a fixed five-year rate of 2.1 per cent for the remainder of this year, along with a 1.5 per cent variable rate available through 2022.

For more information, please contact: Gino Pezzani.

Although you should try to start your day on an upbeat note, spend some time asking yourself what might happen during the day that you’re afraid of— failure to complete a big project at work, for example, or rejection by someone you’d like to date.

Then think of what you could do to prevent failure from happening. Be on the lookout for behaviors and thoughts that add to your fear, and train yourself to change your patterns of action and thinking.

Finally, pay attention to what you learn about failure as you confront it. Use the experience of facing and overcoming your fear to confront and defeat the obstacles you face every day.

Working from home? Home office safety isn’t just a matter of not tripping over pets or banging your head against ceiling lamps. Computer security is essential to both your personal information and your employer’s proprietary data. Forbes recommends these precautions:

1. Install updates promptly. Software updates usually include antivirus programs and other security protections for fixing flaws and safeguarding data. Don’t ignore them when you get a notification on your screen.

2. Keep the VPN on. If you access your employer’s network using a virtual private network (VPN), keep it going. A VPN encrypts information flowing between you and your organization, preventing crooks from stealing sensitive data like confidential financial and customer information.
 
3. Watch for scams. Scammers can create an email address that looks like your company’s, or some other trusted organization’s, to trick you into sharing information or lets them gain access to your organization’s network. Don’t open emails unless you know who sent them, and never click on a link or attachment that’s unfamiliar.
 
4. Create strong passwords. Use passwords to protect access to sensitive data. Take the time to devise passwords that can’t be easily guessed. Strong passwords should have 10 characters, including numbers, punctuation marks, and random capital letters.

Leadership calls for the right perspective on people. The website of the MIT Sloan School of Management shares these words of wisdom from top leaders:

1. Carol Cohen, Cognizant: “Your long-term success is not just determined by what you achieve alone, but also by how you empower, engage, support, and elevate your colleagues and teams in the ecosystem around you.”

2. George Westerman, MIT Sloan: “The ability to envision and drive change is just as important as the ability to work with technology. If you don’t have both, you can’t succeed in this world.”
 
3. Craig Robinson, WeWork: “Creating, aligning, and empowering diverse teams is one of the best ways to discover and develop new ideas.”
 
4. Hal Gregersen, MIT Sloan: “Most leaders excel at thinking, ‘Oh, here are the tasks to be done,’ but they often don’t step back to consider how specific roles are changing and what that means for people experiencing a significant identity shift at work.” 

5. Piyanka Jain, Aryng: “If you’re not going to be able to be data-driven and hold your team accountable from the top, it’s not going to flow down. Leadership is the key.”

6. Doug Ready, MIT Sloan: “Go out on the limb, that’s where all the fruit is. Take a few risks— trust that your people will admire you for doing so. Leadership is a privilege. Embrace it as you build a community of leaders in this new economy.”