By Canadian retail sales saw another modest increase in July, although spending has remained restrained following the central bank’s decision to raise interest rates. According to Statistics Canada, sales rose by 0.3% from the previous month, amounting to approximately 66.15 billion Canadian dollars (equivalent to $49.06 billion). This figure is slightly weaker than the preliminary estimate of a 0.4% increase provided by the data agency last month. Additionally, an advance estimate suggests that sales dipped in August.
The rise in July’s sales was tempered by a drop in sales at car dealers, marking the first decline in four months. Furthermore, a recent port workers strike on Canada’s west coast had a particularly notable impact on motor vehicle and parts dealers.
In terms of volume, sales for July actually slipped by 0.2% compared to the previous month. Notably, sales at gasoline stations and fuel vendors experienced a 1.0% decrease on this basis.
With the central bank raising its benchmark policy rate by a quarter-point in July – reaching a 22-year high of 5% after a similar increase the month prior – the rate has since been kept steady amidst signs of a struggling economy and a slowdown in consumption growth.
Retail Sales Showed Moderate Growth in July
The latest retail sales data from Canada indicates a slightly more positive outlook for the economy in July. After experiencing a contraction of 0.2% at an industry level in June, the retail sector saw a modest increase in sales. Additionally, both wholesale trade and manufacturing sales also made gains during this period.
Compared to the previous year, retail sales in July were 2.0% higher, showing a gradual improvement. However, it is important to note that early indications for August suggest a potential decline of 0.3% on a monthly basis. This estimate is based on a survey of just under half of the companies, and it is subject to revision.
A closer look at the retail data for July reveals that Canadians spent more on food and drink items. Sales at supermarkets, grocery stores, as well as beer, wine, and liquor retailers, increased during this time. Overall, seven of the nine retail sectors tracked by Statistics Canada reported higher sales.
However, there were certain sectors that experienced a decline in sales. Spending at new and used car dealerships, as well as gasoline stations, saw a decrease. When excluding these sectors from the analysis, Canadian core retail sales showed a notable rebound of 1.3% from June. This recovery comes after two consecutive months of declines.
In conclusion, the retail sales data for July paints a moderately positive picture for the Canadian economy. While certain sectors experienced declines, overall sales showed improvement. It will be interesting to monitor future data to assess the long-term impact on the economy.
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