B.C. retail spending slipped in March in advance of the province’s “circuit breaker” to control the spread of the pandemic’s third wave.
Spending fell 1.1% from February to $8.16 billion but rose 18% year over year. Nationally, sales surged 3.6% from February and 23.7% year over year. However, that 12-month growth rate is being amplified by base-year effects as sales fell sharply in March and April of last year due to early pandemic restrictions. B.C. moved relatively early in its pandemic response. Sales rose 14.6% from same-quarter 2020 and exceeded the national increase of 10.6%.
Based on our estimates, lower March sales in B.C. were due to a slip at motor vehicle and parts dealers of about 1% after a strong gain in February. Food and beverage sales fell 7%.
On the bright side, building and materials stores posted stronger sales as households continued to invest in their homes.
Broadly, B.C. retail sales have recovered and are 11% above pre-pandemic levels in B.C. Third-wave restrictions have likely slowed sales, but not to the same extent as other provinces like Ontario which have enacted stricter measures. Statistics Canada’s preliminary estimate is for a 5.1% decline nationally.
B.C. home sales set another monthly record in April, but momentum pulled back in a sign that the demand is moderating towards a more healthy pace as more buyers step back from an overheated market and widespread bidding wars, while pandemic demand may also be waning.
Multiple Listing Service sales reached a record count for April of 13,754 units, which was more than four times year-ago levels (up 314%). While this partly reflects a base-year effect due to the freeze in sales early in the pandemic, levels far exceeded the trailing 10-year average for April sales (excluding 2020) of 8,520 units and outpaced the previous record high set in April 2016 by 6%.
However, a month-to-month drop in monthly seasonally adjusted sales of 14% points to a pullback from peak sales.
Higher mortgage contract rates and surging home values have eroded affordability. Rapid vaccine deployment is also refocusing households to a future of less remote and work-from-anywhere arrangements. •
Bryan Yu is chief economist at Central 1 Credit Union.
