Canada has been steadily progressing economically during the many months of this pandemic, and numbers from the Business Development of Canada says that trend should continue toward a more normal pattern of growth in 2022.
"Like the global economy," says the report from BDC, "the Canadian economy will continue its transition from pandemic recovery-driven growth to more normal growth in 2022. The road to regaining this normality, however, will not be smooth and 2022 will be a year of transition."
Even so, the bank continues households remain "well positioned" to support economic activity, with growth expected to reach 3.5% in Canada in 2022.
"However, it will be important for Canadian entrepreneurs to keep an eye on their supply chains and rising costs, and to implement strategies to address the labour shortage, especially as it will persist for many years to come."
It is from Canadian households, the report goes on to say, this growth will emanate. "The savings they accumulated during the pandemic positions them well to support the economy and has provided them with a small cushion to absorb inflation. However, their consumption habits are expected to return to normal as restrictions on the services sectors gradually ease."
BDC says residential investment will contribute positively to growth again in 2022. "Despite tight inventories, the resale market could experience a wave of transactions at the beginning of the year. Some buyers who anticipate higher interest rates may be more aggressive in order to lock in lower rates.
"The frenzy will slow as the Bank of Canada raises rates. That will be the case for housing starts as well."
