Summary
This analysis presents the outcomes for the year 2021, in the context of the coronavirus pandemic, and provides a financial portrait of the Québec City census metropolitan area (CMA) population. After good results in terms of the cost of living and purchasing power in 2020, the Québec City CMA registered an increased inflation rate (+3.5%) and low growth in personal disposable income per capita (+0.3%) in 2021. However, the average annual salary grew by 4.7%, the highest increase among the eight major Canadian CMAs. Meanwhile, the average hourly wage increased by 2% in the Québec City CMA, the third-highest growth among its Canadian counterparts.
Strong real estate market activity continued in 2021 in the Québec City CMA, with a 15.5% increase in price for a single-family house, and a 5% increase in rent for a two-bedroom apartment. Despite these rises, the average price for a single-family house ($324,075) remains the lowest among major Canadian CMAs. The number of bankruptcies dropped for the fourth year in a row in the Québec City region, with 907 consumers and 135 businesses filing for bankruptcies in 2021.
Conclusion and outlook
Analyzing the data on purchasing power has revealed that the cost of living increased in all major Canadian CMAs in 2021. This increase was in part due to the COVID-19 pandemic, whose effects on prices, supply chains and personal disposable income have contributed to a surge in inflation.
Meanwhile, salaries continued to increase in the Québec City CMA, despite the pandemic, with a 4.7% increase from 2020, the highest among major Canadian CMAs.
However, this was not enough to offset the impact of higher prices on household purchasing power. The 3.5% inflation observed in the Québec City region has raised a lot of worries among both consumers and businesses. Data from the Conference Board of Canada suggest higher inflation levels in the coming years. Although this increase in prices is generalized across the country, inflation is likely to be the main source of worry for households in the coming years.
In 2021, single-family houses were most affordable in the Québec City CMA compared to other comparable CMAs in Canada. The region also registered the second-lowest average rent. Moreover, the number of bankruptcies in the CMA dropped by 17.6% compared to 2020, a fourth consecutive annual decrease. Consumption recovered, rising by over 11% in the region.
The gradual lifting of public health measures allowed for economic recovery. Supply challenges due to the pandemic persisted and are likely to remain.
Inflation came back in force and should increase in the coming years. As mentioned by the Bank of Canada in its Business Outlook Survey Fourth Quarter of 2021, two thirds (66%) of firms are expecting inflation to be above 3% over the next two years.
The evolution of salaries will also have to be monitored given the ongoing labour shortages and the impact of inflation on consumers’ purchasing power.
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For more information or an interview you could reach Ms. Elsa Iskander our advisor in press relations and public communications by mail eiskander@quebecinternational.ca or telephone: 581 446-7707 ou 418 681-9700 ext. 293.
