Retail Sales Show No Growth in December
February 21, 2020
Focus Area—Canadian Economics
The Conference Board of Canada’s Economist Richard Forbes offers the following insights on today's release of data on retail trade:
“Today’s Statistics Canada release showed that retail sales were flat in December. Retail sales increased just 1.6 per cent last year, the weakest annual gain in a decade. The release reinforces our forecast that consumer spending will remain modest this year”
- Retail sales were flat in December after a 1.1 per cent gain in November.
- Sales rose in 7 of 11 subsectors. The largest gains were at building materials stores, where sales increased by 3.8 per cent.
- Outside of the income tax increase, there were no other significant tax measures in Budget 2020.
- In total, retail sales were up 1.6 per cent in 2019. This was the weakest annual gain in retail sales since the financial crisis in 2009.
- After taking into account price changes, total sales volumes edged up just 0.1 per cent last year.
- Sales rose in eight provinces, with Saskatchewan and Alberta posing the largest gains. Meanwhile, sales fell in Quebec and New Brunswick following healthy gains in November.
- On an annual basis, sales increased 2.8 per cent in Ontario, behind only P.E.I. The strong gains reflected the province’s hot labour market.
- Looking ahead, consumer spending is anticipated to expand at a modest pace this year. Slower gains in household disposable income, and a rising household savings rate are key factors weighing on our outlook.