Retail spending decreased in B.C. and across the country in May, signalling a moderation in consumer demand and some impact from retaliatory tariffs passed on to Canadians.
Nationally, retail spending declined one per cent to $69.2 billion in May, while B.C. sales were down a more modest 0.4 per cent to $9.6 billion. Inflation-adjusted national sales fell 1.4 per cent. A major contributor to the national decline was the motor vehicle and parts category, which plunged 3.6 per cent.
According to Statistics Canada, 32 per cent of retail businesses were impacted by tariffs during the month through price increases, altered demand, or higher costs for raw materials, shipping, or labour. This was down from 36 per cent in April.
Despite the month-over-month decline, B.C.’s sales were up 6.9 per cent compared to the same month in 2024 and up 6.3 per cent year-to-date. While seasonally adjusted data for specific sectors is unavailable, the motor vehicle sector saw decelerating growth but was still up 18 per cent year over year.
Other sectors with year-over-year increases included health and personal care retailers, with sales up 10.7 per cent. Clothing, accessories and luggage sales saw a 6.8-per-cent increase, and food and beverage sales were up six per cent. Conversely, building material and garden supplies sales decreased by 4.6 per cent, and gasoline and fuel vendors saw a 13.6-per-cent drop due to lower prices.
Regionally, the Vancouver metro area reported a 1.1-per-cent decline in seasonally adjusted retail sales in May on a month-over-month basis, while unadjusted sales were up 8.9 per cent from a year ago.
In the labour market, B.C.’s payroll employment nudged higher in May, contrasting with a more positive picture from the Labour Force Survey. According to Statistics Canada’s latest Survey of Employers, Payroll and Hour, payroll counts rose by 779 positions, or 0.03 per cent, to 2.57 million. On a year-over-year basis, B.C. job counts rose a mild 0.2 per cent, or 4,451 positions, which is consistent with weak economic growth. This was in contrast to Labour Force Survey employment growth of 0.4 per cent or 13,000 people.
Within classified businesses, goods-producing industries added 2,649 positions, a 0.7-per-cent increase, while services-producing industries lost 863 positions — a contraction of 0.04 per cent. The natural resources sector saw a surge in payroll counts — up 2,455 counts or 8.9 per cent. Manufacturing had a modest decline of 546 positions, or 0.4 per cent. In the services sector, the arts, entertainment, and recreation category reported a notable loss of 1,207 positions — a 2.3-per-cent decrease.
B.C.’s job vacancy rate remained at 3.1 per cent in May, with total vacancies falling to 77,540 — the lowest level since June 2017, outside of the pandemic. This points to weak hiring sentiment from employers, a trend further exacerbated by tariff challenges. Surveys from the Canadian Federation of Independent Business and the Bank of Canada also indicate a persistently soft hiring environment.
Wages are adapting, with average weekly earnings in B.C. down one per cent to $1,295.63 in May, and year-over-year growth at a mild 2.3 per cent.
