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.
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