The Canadian economy contracted in the second quarter with output falling 1.1 per cent on an annualized basis. That decline follows three prior quarters of very strong growth. Most of the decline in real GDP was driven by slowing home sales and lower exports. After rising to record levels, home sales activity across the country have moderated. However, the downshift from record activity to lower, but still strong sales was significant enough to negatively impact economic growth.  That shift in the housing market was compounded by lower exports , which fell 4 per cent largely due to supply chain disruptions, as well as flat household spending due to COVID-19 restrictions put in place in the second quarter in large eastern provinces.  Household incomes grew 2.2 per cent in the second quarter, well outpacing just 0.7 per cent growth in spending. As a result, the Canadian savings rate remains in double digits for the fifth straight quarter. The eventual spending of at least some of the accumulated savings across the Canadian economy will be a key determinant of how the recovery unfolds from here.

Most of the factors that led to a decline in GDP over the second quarter were either one-time changes or due to what should be temporary supply chain disruptions.  Early data for June is showing strong growth, but the pace of the recovery remains uncertain due to the pandemic and especially the Delta variant driven rise in cases around the country.  While Inflation continues to run ahead of the Bank of Canada's 2 per cent target, the fourth-wave of COVID-19 cases is inserting a significant amount of uncertainty into the outlook and may cause a delay in the Bank of Canada's plans, pushing monetary tightening further into 2023.

Link: https://mailchi.mp/bcrea/canadian-real-gdp-growth-q22021

For more information, please contact: Gino Pezzani.

Did you know that Ellis Island closed as an immigration facility in 1954 and reopened as a museum in September, 1990? Annie Moore, a 17-year old girl who arrived with her two younger brothers from Ireland, was the first arrival processed through the station in 1892, followed by more than 12 million other immigrants before the station was closed in 1954.

Around 2.3 million people came through the Island just between 1924 and 1954, although the busiest day at the former immigration center was on April 17, 1907 when 11,747 people were processed. Over the years, Bob Hope, Cary Grant, Irving Berlin and Frida Kahlo all passed through the immigration station during its useful years. At its peak, the station had its own power station, hospital, laundry facilities, and cafeteria.

Today, the Family Immigration History Center at Ellis Island is home to a vast archive of approximately 65 million searchable records of immigration documents. People can locate connections to their own ancestry there, as well as add their contributions to an ongoing catalog of family stories.

According to the COVID-19 Recovery Dashboard, in July most BC housing markets continued to calm from a peak in March. While sales and new listings continued declining, the seasonally adjusted 6-month moving-average for housing starts hit a record level in the province for a second consecutive month. Rents are also beginning to rise sharply in major centers across the province. The average rate for a 1-bedroom apartment rose 6.5% in Vancouver and 8.9% in Victoria in July.

Retail sales continue to post strong figures, with July sales 13% above February 2020 levels. Throughout the month of July and most of August, restaurant reservations have trended upward in Toronto, Montreal, and Vancouver. Google’s average measure of movement trends in BC are at the highest level since March of 2020.

Seasonally adjusted aggregate employment in BC is now at roughly pre-pandemic levels, although high-wage workers are still doing much better than low-wage workers. Manufacturing and exports continue to post very strong figures in the province, with both hitting record levels in July for a second consecutive month. Consumer confidence is approaching pre-pandemic levels, while business confidence is well-above pre-pandemic levels.

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

For more information, please contact: Gino Pezzani.

We’re often told to “follow your passion” in choosing a career, but that’s not necessarily the best advice. Forbes explains why:

• You can have more than one passion. Few of us have a single, overriding goal in life—and that wouldn’t necessarily be healthy. Think through what interests you, the kinds of tasks and activities you enjoy, and find one that’s both motivating and appropriate for a long-term career.

• Passions change. What dazzles you as a teenager may not interest you as an adult. As you grow closer to retirement, your goals for life may change. Don’t lock yourself into a single path you can’t get free of, should the need arise.

• You may not know what your passion is. Most of us have many different interests. Not all of them get us excited, though. You may have to spend some time doing jobs you don’t enjoy before discovering what you really want to do with your life.

• Passion doesn’t automatically translate to skill. You can spend years trying to master what you’re passionate about, only to find you don’t really have the talent to do it professionally. Be realistic about your skills before committing to a lifetime of disappointment.

• Passion can fade. Over time, that thing you once loved may turn into just a job; a series of tasks that doesn’t bring you any joy. Be sure your passion can sustain you over the long term, or be prepared to take on something more stable even if you’re less enthusiastic about it. You can always find fulfillment off the job.

• Passion may not pay the bills. It’s an unfortunate fact of life that many worthwhile endeavors don’t pay very well. Choose something you can do well, even if you don’t love it, so you don’t have to scramble to make a living forever.

Summer has always been special. Wouldn’t you agree that August is extraordinary?

The heat is omnipresent, but at the end of summer there is a cumulative effect of having worked (and played!) so hard that there is a wealth of memories and joy to keep us warm... even as fall approaches and we begin to cool off.

I hope you are having your best summer ever; filled with friends, family, food, and fun.

For now, as the days burn hotter, I hope you enjoy every moment of free time. As we start to lose the last hot days of summer and look forward to seeing leaves falling all around us, it's a vivid indication that we are turning a corner in life. And as the nights cool off, I hope you collect memories and accomplishments that keep you and the people you care about warm for the rest of the year.

Yours,

Gino Pezzani

According to an anecdote, Thomas Edison had a summer residence he was very proud of. He enjoyed showing visitors around the property and pointing out various inventions. At one point, people had to pass through a heavy turnstile to get back to the house.

One visitor asked Edison why, with all the other clever gadgets around, he had such a heavy turnstile. Edison replied, “Well, you see, everyone who pushes the turnstile around pumps eight gallons of water into the tank on my roof.”

As health restrictions eased, Canadian retail sales rose 4.2% m/m to $56.2 billion on a seasonally-adjusted basis in June. Due to declines in April and May, sales remained 3.5% below the March peak. Sales rose in 8 of 11 retail sectors measured by Statistics Canada, with the largest gains occurring in clothing sales (+49.1%), caused by loosening restrictions on non-essential retail. In June, 5.2% of Canadian retailers reported being closed for at least one business day, down from 5.6% in May. Statistics Canada's preliminary retail sales estimate for July, based on just 38% of respondents reporting, is for a 1.7% decline.

In BC, seasonally-adjusted retail sales were largely flat, rising just 0.2% m/m but nonetheless hitting a provincial record for a second consecutive month in June. BC retail sales were up by 12.6% compared to the same month last year. In metro Vancouver, sales were up 1.6% while in the rest of the province sales declined 1%. 

In June, Canadian e-commerce sales declined 10.6% as consumers switched to brick-and-mortar retail. E-commerce accounted for 5.8% of total retail sales in June, down from 7% in May. 

For more information, please contact: Gino Pezzani.
Link:  https://mailchi.mp/bcrea/canadian-retail-sales-june-2021

World Water Week is August 23 to 27. In an effort to develop a water-wise world, individuals and organizations from around the globe meet in Sweden annually to brainstorm sustainability issues and preserve access to our planet’s most valuable natural resource.

This year’s theme is Building Resilience Faster. Visit www.worldwaterweek.org/ to learn more.

BCREA 2021 Third Quarter Housing Forecast Update

Vancouver, BC – August, 2021 The British Columbia Real Estate Association (BCREA) released its 2021 Third Quarter Housing Forecast Update today.

Multiple Listing Service^® (MLS^®) residential sales in the province are forecast to rise 26 per cent to 118,350 units this year, after recording 94,007 sales in 2020. In 2022, MLS^®residential sales are forecast to pull back 15 per cent to 100,150 units.  

“The pace of home sales in the province has slowed in recent months but an unprecedented start to the year still has BC on track for a record-breaking year,” said Brendon Ogmundson, BCREA Chief Economist.

With strong demand being supported by low mortgage rates and a rapidly rebounding post-COVID economy, the more significant concern is whether there will be an adequate supply of listings in the market. The supply situation is especially severe in markets outside the Lower Mainland, where new listings activity has been lackluster. As a result, the average price in 2021 is on track to post a second consecutive year of double-digit gains. We are forecasting the provincial average price to rise 16.6 per cent to $911,300 this year, followed by a 2.9 per cent gain next year to $937,300.

For more information, please contact: Gino Pezzani.

For the complete news release, including detailed statistics, click here.

Technology has enabled a paralyzed man to communicate on a computer screen almost as fast as texting on a smartphone, according to the Science Focus website.

A Stanford University team used artificial intelligence (AI) software and a brain- computer interface implanted in the brain of a man who had lost movement below his neck after a spinal cord injury. The interface consists of two chips, about the size of a baby aspirin, implanted in the man’s motor cortex in the region that controls hand movements. The electrodes in each chip send signals from the neurons to a computer, where the AI software reads the motion of the patient’s hands and fingers.

The scientists instructed the man to imagine he was writing with a pen on a sheet of paper. Although more tests of safety, longevity, and effectiveness have to be conducted before the technique can be used more widely, the interface translated the mental visualization of handwriting movements into text, ultimately reaching a writing speed of about 18 words per minute, with 94% accuracy.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 3.7% on a year-over-year basis in July, hitting the highest rate since prior to the pandemic. Overall, the upward bias of "base-year effects" are no longer substantially influencing the year-over-year CPI changes, although they still have an effect on certain subcomponents such as gasoline. On a seasonally adjusted month-over-month basis, the CPI was up 0.5% in July. The Bank of Canada's preferred measures of core inflation (which use techniques to strip out volatile elements) rose an average of 2.5% year-over-year in July. In BC, consumer prices were up 0.7% month-over-month, and up 3.1% on a year-over-year basis in July. The homeowner replacement cost index, which measures the cost of replacing home structures, rose 13.8% year over year in July, which was the fastest rate since the 1980s. Related costs, such as commissions on the sale of real estate, also rose strongly in July. Prices of passenger vehicles rose 5.5% year-over-year in July due to the continuing challenges related to semiconductor chip supply chains. 

While inflation is currently running higher than the Bank of Canada's 2 per cent target, many economists expect this elevated rate of price increases to be transitory as economies emerge from the pandemic and supply chains normalize. Base-year effects from falling prices during the early months of the pandemic had exaggerated year-over-year changes in CPI, but these effects have now largely ended. The rate of inflation as measured by CPI is very important for the Bank of Canada's monetary policy stance over the next year. If higher inflation is not transitory but instead the result of an over-stimulated economy, the central bank could act to raise interest rates sooner than expected. However, if the uptick in inflation fades in the coming months, we expect the Bank will stay its current course.

For more information, please contact: Gino Pezzani.

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

The pandemic changed everything about the modern workplace, and pushed managers and worker bees alike to rethink what makes for a successful workplace. A vision statement, even one modified for newly learned lessons in diversity and inclusion, can guide your team or organization, but it needs to stimulate real action. Don’t waste your time on vague, feel-good catchphrases. Try this approach for project management:

Recruit a diverse team. Don’t start crafting a vision by yourself, and refrain from including only your usual group of friends and colleagues. Your vision-building team should include people from outside your department, and include employees who work closely with current customers and suppliers, and people from the top, middle, and lower levels of your group or organization. Or, if you work solo, be sure to include freelancers who embody different ideals for a wide scope of insight.

Define your process and purpose. What’s your objective in creating a vision? How do you plan to go about the task? What will the final vision look and sound like? Setting this out ahead of time minimizes the chances that you’ll fall prey to “mission creep” and try to accomplish too much with your project.

Take your time. A vision that inspires people to action doesn’t come out of a single afternoon brainstorming session. Everyone involved with your latest project needs to spend time asking questions about your industry, customers, competitors, trends—everything that affects the success of your vision. You have to build a foundation of learning before you can go forward.

Base your vision on principle. An effective vision isn’t about processes or products, but principles— guidelines for action and behavior. Explore the values that guide the organization: What’s their impact on what people do? Rely on principles that are timeless and easy to grasp, even if they’re sometimes difficult to live up to.

Think from a future perspective. Don’t base your vision on where you are today, but on where you want to be in five, or 10, or 50 years. Pretend you’re writing a history of the organization and talk about the directions you took and the obstacles you had to overcome in order to succeed.