Canadian Retail Sales Rise 0.5% in AugustMonday, November 16, 2015 > 11:08:09
(Wall Street Journal)
Sales beat expectations, driven by higher sales of new trucks and alcohol
Canadian retail sales rose for a fourth-consecutive month in August, beating expectations, driven by higher sales of new trucks and alcohol.
The value of Canadian retail sales increased 0.5% to a seasonally adjusted 43.62 billion Canadian dollars (about $33.2 billion) in August, Statistics Canada said Thursday. Market expectations were for a 0.1% gain, according to economists at Royal Bank of Canada. Excluding motor-vehicle and parts sales, retail sales were flat in August compared with the previous month, at C$32.59 billion. Economists had expected sales excluding motor-vehicle and parts to rise 0.2% in the month.
Retail sales volume, which economists say offers a better gauge of economic activity, rose 0.7% in the month.
Economists at Bank of Nova Scotia said that while retail sales strongly outperformed expectations, the “fly in the ointment” was a lack of breadth in sales that were largely dependent on the automotive sector.
“All in all, only four out of 11 subsectors were up, although those sectors represent more than half of all sales,” the economists said in a note.
The August retail-sales report comes one day after the Bank of Canada downgraded its outlook for economic growth during the next two years but maintained its key interest rate at 0.5%. Recent data suggests that while Canada’s economy is rebounding from an oil-price driven slump in the first half of the year, low commodity prices continue to be a drag on growth.
Lower oil prices are a net negative for the Canadian economy because Canada exports more crude oil than it imports. However, the Bank of Canada has said a decline in the value of the Canadian dollar is boosting nonresource exports to the U.S., which takes about three-quarters of Canadian exports.
Sales by motor vehicle and parts dealers posted the largest gain in dollar terms in August, up 2.0% to C$11.04 billion, led by higher sales of new trucks. Sales at food and beverage stores grew 0.5% to C$9.48 billion on increased sales of beer, wine and liquor.
Offsetting those gains was a decline in sales at gasoline stations, which recorded a 0.6% drop to C$4.76 billion. Sales in the miscellaneous category, which includes merchandise, office supply and stationery stores, were down 2.3%.
Total retail sales for July were revised slightly upward to 0.6%, compared with an earlier estimate of 0.5%. Retail sales excluding motor vehicles and parts were also revised up for July to a 0.1% gain, from an earlier estimate that said sales were flat in the month.