The latest forecast by the Conference Board of Canada predicted a 2.6 per cent increase in the Greater Toronto Area’s gross domestic product this year, but new data from Statistics Canada indicated that this will appear to have negligible impact on Torontonians’ purchasing power.
This is because the average earnings per week in Ontario improved by just 1.1 per cent last year, a troubling development in light of the steady growth in home prices that the province has been experiencing over the past few quarters.
“There’s a collision between the psychology of consumer confidence and the reality of the economic numbers,” Nanos Research executive chair Nik Nanos told CBC News. “When people don't feel that real wages are significantly increasing, when they're unsure about their level of job security, it creates a psychological chill on consumer confidence.”
And this trend is not set to cool down any time soon, as the region’s inflamed housing market has actually become a crucial driver of Ontario’s income. Real estate now represents 13.2 per cent of the provincial GDP, a larger figure than the manufacturing segment’s 12.1 per cent.
Crucially, the decline in manufacturing’s significance was brought about by the 2008-09 recession, and part-time / contract work has become an economic reality for the new generation of workers in Ontario.
Early sales figures ‘cause for concern’
Borrowing costs counteract effects of gov’t measures, Home Capital woes - poll