It appears the struggling economy in Alberta is taking a toll on the province’s retail sector.
Statistics Canada reported on Friday that retail sales in the province in September dipped to $6.7 billion, representing a decline of 1.6 per cent from August and down 2.7 per cent from a year ago.
In Canada, retail sales decreased for the first time in three months, edging down 0.1 per cent to $51.6 billion in September. The decline came from lower sales at motor vehicle and parts dealers and gasoline stations. Excluding these two subsectors, retail sales rose 0.7 per cent, it said.
On an annual basis, however, retail sales in the country were up one per cent.
“The largest contribution to the monthly decline came from the motor vehicle and parts dealers subsector (-1.0 per cent), which declined for the first time in three months due to lower sales at new car dealers (-1.9 per cent). Sales were up at used car dealers (+3.6 per cent), following a 3.0 per cent decline in August,” said the federal agency, explaining the national sales.
“Sales at gasoline stations (-2.3 per cent) were down for the second month in a row, reflecting in part lower prices at the pump. In volume terms, sales at gasoline stations were down 1.1 per cent.”
Robert Kavcic, a senior economist with BMO Capital Markets, said sales volumes are a touch below year-ago levels highlighting the more subdued pace of Canadian consumer spending.
In a commentary note, he said “the Canadian consumer continues to look a bit tired and the broader economy remains on pace for slightly below potential growth in the near term.”
Omar Abdelrahman, an economist with TD Economics, said performance in the retail sector is nothing to write home about. “The good news is that momentum (in volumes) has continued to improve, with volumes up 0.5 per cent (1.9 per cent annualized) in the third quarter. The release leaves our third quarter GDP tracking unchanged near the one per cent mark, slightly below the Bank of Canada’s 1.3 per cent,” he said in a commentary note.
“The ongoing strength in Canadian labour markets, the recent momentum in housing markets and wages, and the downshift in borrowing rates may have provided a modest lift to consumer spending. Still, elevated household debt levels and associated debt-servicing costs will continue to cap any meaningful acceleration in retail sales or consumer spending.”
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