Canada | Retail sales down 0.2% in March

(Ottawa) Retail sales in Canada slowed in March as consumers spent less at retailers of furniture, home furnishings, electronics and household appliances, Statistics Canada reported Friday.

The federal agency reported that national retail sales fell 0.2% to $66.4 billion in March.

But it specifies that its first estimates for April point to an increase of 0.7% in retail sales for this month.

According to Katherine Judge, senior economist at CIBC, Canadian retail sales ended the first quarter on a weak note.

“The slowdown in momentum during the quarter reflects consumer caution as mortgages come up for renewal at higher interest rates,” M wrote^me Judge in a report.

It is also consistent, she adds, with the fact that the Bank of Canada could begin to reduce interest rates in June.

“The preliminary estimate for April sales suggests an increase of 0.7%, but this will partly reflect the surge in gasoline prices, with actual volumes likely to rise at about half that pace, and only reversing the decline in March,” says M^me Judge.

The Bank of Canada’s next interest rate decision is scheduled for June 5.

Gov. Tiff Macklem indicated in April that it was possible the central bank could cut rates in June, but that the decision would be based on economic data.

Statistics Canada reported that retail sales declined in March in seven of nine subsectors.

Sales at retailers of furniture, home furnishings, electronics and household appliances fell 1.6%.

Sales at clothing, clothing accessories, footwear, jewelry, luggage and leather goods stores also fell 1.6%.

Retail sales at motor vehicle and parts dealers rose 1% in March, helped by a 1.1% increase at new car dealers.

Core retail sales, which exclude gas stations, fuel sellers and automobile vehicle and parts dealers, fell 0.6%, according to Statistics Canada.

The only core retail subsector to see an increase in sales was building materials and garden equipment and supplies dealers, which gained 1.3%.

In volume terms, overall retail sales fell 0.4% in March.

Statistics Canada also mentions that retail sales declined in six provinces, including Ontario.

The latter recorded a decline of 0.3% in March, mainly attributable to lower sales at retailers of sporting goods, hobbies, musical instruments, books and miscellaneous details.

Quebec instead saw a 0.6% increase in retail sales to stand at 14.8 billion.

In the Maritimes, Nova Scotia also saw growth of 0.5%, while New Brunswick recorded a 0.2% decline in retail sales in March.