Reference to the CFA’s Advocacy Update from June 1, 2022

In March, the client-facing industries continued to recover ground lost in December 2021 and January 2022 when public health measures were put in place to dampen the spread of the Omicron variant.

Accommodation and food services continue to grow

Following a 14.3% jump in February, the accommodation and food services sector rose 10.9% in March as both subsectors were up.

Food services and drinking places (+8.5%) led the growth in March as capacity restrictions continued to be lifted and the proof of COVID-19 vaccination requirements were eliminated across several provinces during the month.

Accommodation services rose 17.3% in March, up for a second consecutive month. Traveller accommodation services led the growth, lifted by a higher number of domestic and international travellers in the month.

Transportation and warehousing keeps rolling

Transportation and warehousing rose 3.2% in March, following a 2.4% growth in February, as 8 of 10 subsectors were up.

Air transportation jumped 57.2% in March as airlines carried more goods and passengers. The lifting of restrictions on international arrivals’ landing ports along with pent-up demand for March break travel by the general public all positively contributed to the spike in activity.

Support activities rose 2.6% in March, up for a fifth time in six months, on a broad-based growth across most industries as only support activities for rail were down in the month.

Transit, ground passenger, and scenic and sightseeing transportation expanded 3.0% in March, up for the second month in a row, benefiting from an increase in public transit ridership.

Pipeline transportation increased 1.8%, the highest monthly growth rate since November 2020, as pipeline movement of natural gas and crude oil and other transportation both rose in March 2022.

Arts, entertainment and recreation performs well in March

The arts, entertainment and recreation sector increased 13.5% in March, the largest growth rate since July 2020, as many spectator sport venues, recreation centres and casinos allowed more patrons to attend their facilities.

Amusement, gambling and recreation industries (+14.7%) contributed the most to the growth in March as higher activity at casinos, bingo halls and other gaming terminals led the increase.

Performing arts, spectator sports and related industries, and heritage institutions grew 11.9% in March as attendance at professional sporting and performing arts events increased.

Construction up, building upon two months of growth

The construction sector rose 1.2% in March, with output surpassing April 2021 to reach an all-time high, with all subsectors contributing to the growth.

In March, residential building construction (+1.8%) led the growth for the third month in a row, with home alterations and improvements and construction of single-detached homes contributing the most to the increase during the month.

Non-residential building construction rose 0.9% in March, up for the ninth consecutive month. All construction activities posted gains with commercial building construction contributing the most to the increase, driven in part by a retail development in Mount Royal, Quebec.

Engineering and other construction activities increased 0.6% in March, continuing an upward trend that began at the end of 2020 and is 1.9% below February 2020’s pre-pandemic level of activity. Repair construction rose 1.2% in March 2022, up for the seventh time in eight months, as both the residential and non-residential segments expanded.

Finance and insurance up as global instability creates market volatility

The finance and insurance sector increased 0.4% in March, up for a 10th month in a row, on a broad-based growth across the sector. The escalating conflict in Ukraine and the isolation of Russia from the global financial markets, contributed in part towards an unprecedented net inflow of funds in the Canadian economy in March, as the value of traded activity on the Toronto Stock Exchange climbed to the highest level since March 2020.

Financial investment services, funds and other financial vehicles rose at its fastest pace since November 2020, up 2.1% in March 2022.

Wholesale trade declines

Wholesale trade contracted 0.7% in March, down for the third month in a row, as five of nine subsectors were down.

Machinery, equipment and supplies wholesaling (-3.9%) contributed the most to the decline in March, as all industries comprising the subsector were down. Farm products wholesaling contracted 15.1% in March as lower output of grain and oilseed dealers was reflected in lower exports of canola and other grains as supplies dwindled following a drought-stricken 2021 harvest.

Miscellaneous wholesaling (+4.2%) rose for the second month in a row, and building materials and supplies wholesaling expanded 1.7% in March, benefiting from an increase in construction activity.

Retail activity shrinks for the second month in a row

The retail trade sector contracted 0.6% in March, down for the second month in a row, as a decline in the motor vehicle and parts dealers subsector more than offset gains in the majority of other subsectors. Excluding motor vehicle and parts dealers, retail trade rose 0.7%. Motor vehicle and parts dealers dropped 7.7%, the largest monthly decline since December 2020, as activity at dealers’ lots dipped for the second month in a row.