Is the Canadian economy really that strong?
After exhibiting very strong signal for the past 6 months, Canadian consumer decided to stay home in April. Consumer sale (seasonally adjusted) fell 2% in April (vehicle, clothing were the worse) with 10 of 11 sectors showing a marked drop off. It could be a reaction to the retailers attempt to increase prices (a reflection of their increased costs, but desire to maintain margins) again illustrating that it is easy for retailers to confuse being price giver and price takers. BTW the 2% drop wipes out eh March increase in retail sales.
The auto sector saw its biggest drop at new car dealers down 5.3%. In terms of regional distribution the worse affected province was Quebec (-4%) – but it is the province that has been the least affected by the crisis. Ontario, Canada’s bellwether, saw a 1.3% drop in sales. For completeness sake, Canadian retails sales have been on an uptrend since early 2009.
April retail sales were down in all provinces, but Quebec saw the biggest fall, 3.9 per cent, after five consecutive increases. Ontario also dropped 1.2 per cent following three positive months.
National retail sales have seen an upward trend since early 2009. Few months have seen decreases since the stock market first plummeted in the fall of 2008. Over the past 12 months retail sales are up 6% in Canada.
For those interested on a "unadjusted" basis sales were up 7% on March 2010. Weather is a very important factor in Canada.
Comments