An October lull gave way to a surge in B.C. spending in November as retail sales growth leaped head and shoulders above the rest of the country.
Retail sales climbed 1.9% from October to a seasonally adjusted $5.74 billion. In comparison, sales were up only 0.4% nationally.
Motor vehicle sales provided a substantial lift to overall activity (4%), which is not surprising given last week’s report of a modest gain and record level of new vehicle sales during the same month. Even without autos, sales were robust with growth in most product sectors, particularly related to electronics and appliances, clothing and sporting/recreation goods.
Our estimate of core retail sales, which excludes autos and gas, climbed a solid 1.3% during the month.
November maintained the sales uptrend. Year-over-year sales were 7% higher, with year-to-date gains at 5.8%.
Sales were generally up across the board from a year ago by both measures, although sales at gasoline stations were down year-over-year and up only 2% through 11 months due to the drop in gasoline prices.
However, lower gas prices support consumer spending and economic growth because associated savings are spent elsewhere in the economy.
Retail price inflation of about 1% points to real growth of about 4.5% over the first 11 months.
We anticipate that retail sales will climb about 4% this year. While stronger hiring momentum and tourism activity will lift sales, decelerated growth in the housing markets following a solid 2014 is expected to dampen sales growth.
Bryan Yu is senior economist at Central 1 Credit Union.
