The cost of housing may be increasing steadily in British Columbia, but that isn’t stopping consumers from opening their wallets and spending more on retail goods.
B.C. retail sales jumped 8.3% in the 12 months to May, according to Statistics Canada data released July 23. This is the highest increase in the country and well above the national average of 2.7%. Total sales in B.C. were $5.9 billion in May compared with $5.4 billion last year.
The biggest drivers for retail sales gains in the province were at general merchandise and clothing stores.
Across Canada, retail sales were $41.8 billion.
The cost of food is on the rise nationally, according to last week’s Stats Canada report on June inflation, and this was already reflected at grocers’ cash registers in May. Total spending at supermarkets and other grocery stores was up 6.5% year-over-year.
On a month-by-month basis, spending increased 1.0% across Canada in May, which moderately beat expectations of a 0.5-0.6% gain.
“However, before breaking out the bunting and party hats, note that the headline figure was flattered by rising gasoline prices and a strong month for car sales,” BMO’s Douglas Porter said. “While not a big upside surprise, the mildly encouraging retail results break a run of sour news for the Canadian economy.
“The decent result also plays up the fact that the consumer is still doing its job; now the economy needs some serious help from non-resource exports.”
Moneris finds similar trends
A Moneris report on total spending in 2015’s second quarter, also released July 23, also found B.C. had Canada’s biggest increase in consumer spending with 9.2%. Canada-wide sales grew 6%.
Across the country, spending was driven by sales in restaurants, retail stores – especially women’s accessories stores – and home improvement stores.
Moneris also found spending on foreign credit cards increased 14.08%, which is more than twice the overall increase.
“The low dollar has made Canada a comparatively affordable destination for foreign tourists, particularly our neighbours to the south,” said Moneris CEO and president Angela Brown.
“With the additional interest rate cut last week, this is a trend we expect to continue in the near future.”
