Retail sales increased 1.7% in November, reaching $44.3 billion and handily beating analysts’ forecasts of a 0.2% rise, according to Statistics Canada data released January 22.
Gas stations sales declined 0.6%, but beyond that, all subsectors increased in the month. The biggest driver behind the strong results was a 4.5% increase in sales at new car dealers; this was the fifth consecutive month in which this industry saw growth, with the strongest increase found in new truck sales.
Sales at food and beverage stores grew 1.5%, driven by higher volumes as prices stayed flat.
Overall sales volumes increased 1.5%.
Black Friday sales could be behind much of November’s gain, as sectors selling products that are sold during these promotions had strong growth. Clothing and accessories stores (up 2.2%) and electronics and appliances stores (up 2.1%) had strong showings this month.
CIBC Economics’ Andrew Grantham said this means we should caution against reading too much into November’s strong sales.
“We have seen in recent years that people are bringing purchases forward into November (Black Friday sales) at the expense of December,” Grantham said in a note to investors.
“So we could get a pull back next month.”
In the 12 months to November, sales increased 3.2% across the country, also driven by motor vehicle and parts sales, up 11%. Sales of used cars increased 26% over the period
In British Columbia alone, sales were up 1.8% to almost $6.1 billion in November. Year-over-year, sales increased 5.4%—more than two percentage points higher than the national average.
These results could point to a solid increase in gross domestic product for the month, Grantham said. Statistics Canada is scheduled to release GDP data January 30.
The Canadian dollar reacted positively on the January 22 release of both November’s retail data and December’s CPI numbers. As of press time, the loonie had pushed above the 70-cent mark and was trading at almost 70.7 cents U.S. This is up more than seven-tenths of a percent from the previous day.
