The country’s retail sector will limp into 2023 after recording the first negative holiday retail sales season since the start of 2009.
The International Council of Shopping Centers expected December sales to slip at least 2 percent from the same period in 2022, a scary sign for retailers entering the new year. The fourth quarter is historically the strongest for merchants, but was dragged down this year by growing consumer anxiety.
The showing “does not bode well for 2023,” said Michael Rockwell, ICSC’s chief economist. “It suggests that the lingering problems will be the backdrop for the new year.”
Twitch Ratings, a global economic rating agency, expects the trend will continue as consumers curb discretionary spending and try to hold on to their cash.
Twitch projects personal consumption expenditures to decrease over 1 percent in 2023, driven by concerns over job security, a difficult lending environment and falling home prices.
“These negative pressures will far outweigh any benefits consumers get from a decline in energy and commodity prices,” the group said in a statement.
The residential housing market slowed several months before the recession began at the end of 2021. The greatest declines were in Toronto and the surrounding suburbs, while prices for high-end properties in Golden Horseshoe markets like Lincoln actually saw a small price increase as urban Baby Boomers flock to neighboring communities with Go-Train access, to push their house savings further.
The dramatic fall in housing prices has forced many large-scale residential projects to be put on hold. Our very own Prudhommes Landing is looking precarious as pre-sale targets were missed by 35%. How will the municipality and builders respond?
As home prices continue to fall in the Toronto region and across the country, many buyers wait on the sidelines for them to sink even further in hopes of timing the market.
This economic slowdown means more pressure is put on the municipal budget. There is less money available from taxes, and that money has to go further in order to support residents during these difficult times.
To ensure that every dollar is wisely spent, the town is polling residents to prioritize municipal services through the use of market intelligence tools, and trimming services citizens view as less important.
Critics say that municipalities should have been more prepared for this downturn. “This is what happens when we spend, spend, spend, and forget to save for the rainy days that eventually show up”, one resident told us.
In addition to unmet infrastructure needs, cities are bridled with an increasingly outdated tax system that doesn’t reflect the shift to a service economy. “I had hoped the Great Recession would cause cities to really examine the adequacy of their fiscal architecture,” says Dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. “But for the most part, that hasn’t happened.”
Cities continue to face those entrenched, longer-term trends that will make it much harder to weather future fiscal storms.
An exception to this was the Town of Lincoln, who anticipated the looming recession in their 2019 Strategic Planning Process and built the capacity to respond to the economic downturn through progressive economic policies, planning for financial sustainability, developing a culture that is ‘Open for Businesses,’ and uniting the community under a shared vision for One Lincoln.
In the amalgamation of former towns – Lincoln, West Lincoln, and Grimsby – the policies and initiatives underway set the tone for a more progressive, vibrant, future-focused Greater Lincoln.