Canada’s March retail sales declined 1%, as compared with consensus projection of a drop of 0.6%. However, it was above February’s upwardly revised figure. Canada’s retail sales in terms of volume dropped by even larger number of 1.3% m/m, reversing almost the entire growth recorded in February.
The drop in nominal sales was widespread. Out of 11 subsectors, declines were registered in six of the subsectors in March. Following month-on-month significant growth in February, sales of motor vehicles and parts dealers declined 2.9%, while, sales of user car dealers and new car dealers dropped by 3% and 3.7% m/m respectively. Gasoline stations sales also declined.
Region wise, sales declined in nine out of ten provinces. Most of the decline was seen in New Brunswick by 3%, followed by Newfoundland & Labrador and Nova Scotia recording drops of 2.1% and 1.4% respectively. However, major loses were also recorded by B.C., Quebec, Alberta and Saskatchewan. The only exception was Prince Edward Island that registered growth.
On a quarter-on-quarter basis, Canada’s retail sales volume was up 1.6%, supporting the view that the country’s economy has a strong showing in Q1 2016, said TD Economics in a research report. However, even if the data is volatile, March’s retail sales report implies that Canada’s economic growth is decelerating rapidly from the pace of Q1 that is at present tracking around 2.6%, added TD Economics.
This year, Canada began on a solid footing; however the slowdown in the wholesale trade, exports and the retail sales implies that the economy will weaken in the second quarter that will be further impacted by the wildfires in Northern Alberta.
“On average, we expect the Canadian economy will grow by just under 2% per year as the pace of consumer spending slows in the midst of the structural adjustment to lower oil prices. As such, expect the divergence in provincial performance to persist”, noted TD Economics.
The material has been provided by InstaForex Company – www.instaforex.com