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Greater Niagara Chamber of Commerce

Daily Update: February 21, 2023

Inflation now at 5.9%, food prices up 10.4%; General Motors to build EV motors at St. Catharines propulsion plant, and more.

In this edition:

Inflation now at 5.9%, food prices up 10.4%

The Consumer Price Index (CPI) rose 5.9% year over year in January, following a 6.3% increase in December. Prices for cellular services and passenger vehicles contributed to the deceleration in the all-items CPI. However, mortgage interest cost and prices for food continue to rise.

Gasoline prices contributed the most to the month-over-month increase in the all-items CPI, rising 4.7% in January. The price increase was related to refinery closures in the southwestern United States following winter storm Elliot.

Cellular service prices fell 7.9% on a year-over-year basis in January, following a 2.5% increase in December. Some Boxing Day sales remained available into January, leading to a decline when compared with the same month a year earlier.

Year over year, consumers paid 6.2% more for passenger vehicles in January following a 7.2% increase in December. This slowdown in price growth is partly attributable to a base-year effect, caused by a 0.9% month-over-month increase in January 2022, when prices were impacted by ongoing supply chain constraints. In comparison, vehicle prices declined 0.1% month over month in January 2023. Lower availability of new model-year vehicles in January 2023 compared with January 2022 may also be contributing to the year-over-year deceleration.

Food prices, which include both groceries and food from restaurants, rose at a slightly faster pace year over year in January (+10.4%) than in December (+10.1%). Grocery price acceleration in January was driven in part by year-over-year growth in meat prices (+7.3%), resulting from the largest month-over-month increase since June 2004. Fresh or frozen chicken prices were a notable contributor to the gain, rising 9.0% in January compared with December, the largest monthly increase since September 1986. Among other factors, chicken prices rose amid stronger seasonal demand as well as ongoing supply constraints, elevated input costs and issues related to avian influenza. Additional acceleration was seen in year-over-year price increases for bakery products (+15.5%), dairy products (+12.4%) and fresh vegetables (+14.7%).

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General Motors to build EV motors at St. Catharines propulsion plant

General Motors (GM) says it plans to build motors for electric vehicles at its St. Catharines, Ont., propulsion plant, the latest commitment by an automaker transitioning toward an electric future.

The company says the move, subject to support agreements with the federal and provincial governments, is expected to support around 500 jobs at the facility.

The St. Catharines plant currently has a little over 1,100 employees producing V-6 and V-8 engines as well as transmissions.

GM says the new Ultium electric drive units will replace some internal combustion engine production after retooling, while it still expects to continue to produce V-8 engines alongside the new motors at the plant for some time.

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Retail trade picked up to $62.1 billion in December

Retail sales increased 0.5% to $62.1 billion in December. Sales increased in 7 of 11 subsectors, representing 75.1% of retail trade. Higher sales at motor vehicle and parts dealers (+3.8%) and general merchandise stores (+1.7%) led the increase.

Core retail sales—which exclude gasoline stations and motor vehicle and parts dealers—increased 0.4%.

In volume terms, retail sales increased 1.3% in December.

Retail sales increased 8.2% in 2022, led by gasoline stations and general merchandise stores. In volume terms, sales were up 1.5% in 2022.

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West Niagara wineries, grape growers ‘can’t win’ with this year’s unstable weather

This year’s temperature swings has been a cause for concern among west Niagara’s wineries and grape growers.

According to winemakers, production hasn’t been impacted, but the yo-yoing weather is not ideal for grapes.

“It certainly has been a year of extremes, that’s for sure,” said Sue-Ann Staff, owner and winemaker at Sue-Ann Staff Estate Winery.

At the start of the month, the Jordan winery was scared the extreme cold would damage the wines, but the recent warm temperatures have also become an issue.

“It’s a little bit of a can’t win right now. It’s hard to know what to plan for.”

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Government of Canada invests in skills training to address shortages in trucking industry

Today, the Minister of Transport, Omar Alghabra, on behalf of Employment, Workforce Development and Disability Inclusion Minister, Carla Qualtrough, announced that the Government of Canada is investing up to $46.3 million to Trucking Human Resources Canada under the Sectoral Workforce Solutions Program. The organization’s Driving Economic Recovery project will provide training subsidies and wage subsidies to support the recruitment, training and onboarding of up to 1,400 new truck drivers and 1,200 workers for other in-demand occupations within the trucking sector.

This project will address inconsistencies in driver training by developing a national standard that will support transferable skills and bridge the gap between entry-level training and employability throughout Canada. Up to 2,600 participants—with an emphasis on women and other equity-deserving groups—will receive training, on-the-job work experience and other wraparound supports, such as travel and living expenses, to prepare them for a career in the trucking sector.

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Focus on Finance & Economy

Bank of Canada: Here are the top inflation indicators taken into consideration

The Bank of Canada may have room to hold interest rates at its next March meeting after one of the key inflation indicators it tracks showed some relief in January.

On Tuesday, Statistics Canada reported the Consumer Price Index (CPI) rose 5.9 per cent in January compared to a year ago, slower than the estimated 6.1 per cent gain expected by economists tracked by Bloomberg.

However, core inflation measures are just one of the many factors the Bank of Canada takes into consideration with its key monetary policy rate decisions.

Here are the indicators on the Canadian central bank’s radar, when it comes to tackling high inflation.

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Through the Daily Updates, the GNCC aims to deliver important business news in a timely manner. We disseminate all news and information we feel will be important to businesses. Inclusion in the Daily Update is not an endorsement by the GNCC.

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