Economic Impacts

June 3, 2020 | Canada

As this unprecedented situation continues to rapidly evolve, Avison Young’s briefing notes are intended to provide an up-to-date assessment of the impact on the commercial real estate market.

Period covered: May 16th to 29th, 2020

As difficult as the first few months of the pandemic have been, as we enter June and the summer months, most provinces across Canada have either opened or are eager to open soon. The hope is that workers will be able to return to their businesses and some “new normal” routines can be established. On the commercial real estate side of things, those who have been hesitant to transact may also see an opportunity to move forward as the re-opening gathers momentum.

Down, but not out – with a silver lining on the horizon…

There’s no doubt that the economy is in uncharted territory and the sharp decline in employment, among other leading indicators, is proof enough. The two million lost jobs revealed by Statistics Canada’s April Labour Force Survey brought the total decline since February to three million people – pushing the unemployment rate to 13%. While it’s difficult to fathom this or even higher levels of unemployment along with other largely negative headlines, the hope is that many of the unemployed will return to the workforce, because they have been furloughed (temporarily laid-off), or perhaps because there will be sufficient new opportunities arising from whatever the new economy will demand. In this regard, there are green shoots in the offing as the country slowly begins to emerge from the “Great Lock-Down”. A recent Linkedin survey entitled “Who’s Hiring in Canada” revealed a number of companies (and industries) that are hiring right now or in the coming months to meet coronavirus-related demand, including Amazon, Shopify, Dollarama, Dialogue and Sienna Living, to name a few.

Data Source: LinkedIn

Though tepid, consumer confidence showing renewed optimism

According to the Conference Board of Canada, the Index of Consumer Confidence climbed 16.2 points to 63.7 in May, after hitting a record low in April, and is now slightly higher than its trough of 56.3 during the 2008-2009 Financial Crisis. In all, the index is still down some 60 points since February, before the lockdown.

Canada Index of Consumer Confidence - May 2020 (2014 = 100)

Data Source: Conference Board of Canada

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The spread of COVID-19 and the containment policies being introduced are changing rapidly. While information in the briefing notes is current as of the date written, the views expressed herein are subject to change and may not reflect the latest opinion of Avison Young. Like all of you, Avison Young relies on government and related sources for information on the COVID-19 outbreak. We have provided links to some of these sources, which provide regularly updated information on the COVID-19 outbreak. The content provided herein is not intended as investment, tax, financial or legal advice and should not be relied on as such.