Strong retail showing signs of weakening

B.C. retail spending rebounded in September following an August decline, but the trend points to a tempering of activity after a flurry early in the year.

Sales rose 0.4% to a seasonally adjusted $7.11 billion. Year-over-year sales decelerated from 10.4% in August, but remained robust at 9.8% in September. In comparison, national sales rose 0.1% and 6.2% year-over-year.

Like the national performance, stronger gas station sales – which reflected higher pump prices more than consumer demand – supported growth. Year-over-year sales in housing-related sectors also accelerated. Building materials and garden equipment sales were up 29%, furniture and furnishing sales were 2.9% higher and electronics were up 3.8%. In contrast, motor vehicle sales growth slowed (but remained high at 24%), clothing sales were flat and sporting goods sales declined.

Notwithstanding monthly fluctuations, sales have softened since mid-year, coinciding with a period of flatter employment and home sales trends. Excluding auto and gas station sales, declines have steepened in recent months.

Nonetheless, year-to-date sales rose a stellar 9.7% through three quarters and are on track to follow up last year’s 7.4% gain with the strongest performance since 1994. Metro Vancouver sales are up 10%, but the rest of the province (up 9.4%) is not far behind. Low retail price inflation points to real growth of more than 8%.

September international tourism inflows into B.C. accelerated to the highest level since April after sliding in recent quarters. Total tourist visits reached a seasonally adjusted 474,612 persons, up 2.3% from August with gains in both U.S. and overseas visitors.

While the general trend has been negative in recent quarters, tourism remains high with inflows up about 35% compared with five years ago and above Vancouver 2010 Winter Olympics levels. Stronger tourism growth in recent years largely coincided with Canadian dollar depreciation, which has now stabilized at a competitive level but has dampened upward momentum. Other factors supporting elevated tourism levels include higher travel demand from China; removal of visa restrictions for Mexican travellers; and, potentially, a reallocation of global tourism dollars away from the U.S. due to the political climate.

Year-to-date, total international visits rose 3% through September, compared with a 12% pace during the same period last year. Growth in overseas tourism is 6.1% this year; inflows from the U.S. are up 1.4%. •

Bryan Yu is deputy chief economist at Central 1 Credit Union.

comments powered by Disqus

More from Economy

NAFTA uncertainty spurs Canadian businesses to consider moving south: survey

26% of businesses polled said they would move part of their operations to the U.S. in response to trade negotiations.

Read Article

Canadian household debt hits record high: StatsCan

Read Article

Insider trading: December 12, 2017

The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed in the week ...

Read Article

B.C.’s employment jumps in November

Read Article

Infographic: How currency impacts your investments

Currency fluctuations don't just affect foreign purchases; they can also have an impact on portfolio performance. This infographic explains why.

Read Article

Subscribe to our mailing lists

You may withdraw your consent at any time.

* indicates required


* You can modify your newsletter subscriptions at the bottom of any newsletter you receive.
Business in Vancouver Media Group
303 West 5th Avenue, Vancouver, British Columbia
V5Y 1J6 · Canada