London marked the second anniversary of the pandemic by posting its lowest unemployment rate since COVID-19’s arrival in 2020 — a reflection of the resilience and strength of the local economy, observers say.
London’s unemployment rate went down for the second straight month in March, dropping to 5.3 per cent from February’s 5.8 per cent, Statistics Canada said Friday.
March’s decline results in part from the addition of about 800 new jobs, capping two years of economic turmoil that saw the London area lose more than 30,000 jobs during the first wave of the coronavirus.
With 292,700 people employed last month, the London region now has close to 23,000 more jobs than it had before the pandemic hit — among the strongest showings in the country.
“It’s fair to say London has performed and recovered exceedingly well, relative to many other metropolitan areas across Canada,” said Liam Daly, an economist with the Conference Board of Canada.
Daly attributed London’s strong performance to its diverse economy. Though the retail and service sectors were hard hit in London, as elsewhere in the country, they represent a smaller percentage of the overall economic activity of the city.
“It has a lot to do with the industry composition that exists in London,” Daly said.
“You have manufacturing, the health-care sector, the financial sectors. Those sectors in particular. . . have provided a bit of insulation for the economy. It all speaks to the resilience of the industries that include the London economy.”
London Mayor Ed Holder said the city has managed, amid all the uncertainty, to “set the right tone” to promote economic growth.
“The city has done extraordinarily well,” he said. “London has been the most consistent and strongest economy in the country. . . It’s obvious that the business community has confidence in London.”
Provincially, Ontario added 35,000 jobs in March, helping bring its jobless rate down to 5.3 per cent from February’s 5.5 per cent
Canada’s unemployment rate also sits at 5.3 per cent, the lowest rate on record for the country since similar data began being tracked in 1976.
Though the past two years have been marked by job losses and disruption to the economy due to lockdowns and other measures meant to slow the spread of COVID-19, London now finds itself with a different type of problem: Finding qualified workers to meet the growing needs of businesses.
“The biggest challenge is availability of talent,” said Kapil Lakhotia, chief executive of the London Economic Development Corp.
“And this isn’t unique to any one industry. Every single industry sector is facing the same constraints. Employers of various sizes, small, medium and large, they are all feeling the same labor crunch.”
In March, there were about 7,000 jobs available in the wider London region, Lakhotia said.
Projects now underway, such as the Maple Leaf plant in London and Amazon’s new distribution center in nearby Talbotville, are expected to add thousands of jobs in the coming years.
There is also growing optimism across Southwestern Ontario amid investments by corporations and federal and provincial government in electric-vehicle (EV) production and rumors that another large auto parts plant may land in the London area. Those investments bode well for a sector of the economy that employs close to 35,000 across the London region.
“All these new investments made in EVs and supply chains around electric vehicles will help ensure long-term sustainability of manufacturing in our area,” Lakhotia said.
Besides finding enough workers, the London region has other challenges.
Daly said inflation, which has hit record levels in Canada in recent months, could reduce the spending power of people, slowing the local economy.
“While wage growth has started to trend upward, wages aren’t catching up yet with that inflation,” he said.
“So what that means is that the spending power for households is falling, and this is particularly hard on low-income households who devote a larger proportion of their expenditure on necessary items such as housing, clothing and gas.”
The COVID-19 pandemic, which continues to disrupt supply chains, and the war in Ukraine are other external factors that could dampen the economic outlook of the country and the city.
Holder, however, remains optimistic.
“London is a magnet and people want to come here,” he said. “I would say our best days are still ahead of us.”
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