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April 24, 2012
CALGARY, AB, Apr. 24, 2012/ Troy Media/ – A big part of the economic recovery has been the resilience of the Canadian shopper. After a brief, sharp, initial dip, wallets opened up and people hit the malls across the country. In February, however, the cash registers slowed down slightly.
Nationally seasonally adjusted retail sales dipped 0.2 per cent in February over January, to $38.9 billion, but sales were nonetheless 4.1 per cent higher than a year ago. While car sales have been a big driver of retail sales growth, with motor vehicle and parts sales being 9.4 per cent higher year-over-year, most of the monthly decline was due to lower new car sales (dipping 2.8 per cent month over month).
Rock bottom interest rates are surely helping spur car sales higher. Not only do low rates reduce the monthly car payments, but the jolt in housing values (spurred on by low interest rates) also helps car sales by increasing household equity. That is to say, one of the big reasons home equity lines of credit are used is to make large purchases.
While higher retail sales are generally seen as good for the economy, higher spending due to retail gas price isn’t considered a positive (Eastern Canada imports large quantities of crude). Canadians spent $4.9 billion at gas stations in February 2012, 6.7 per cent more than then they did in February 2011.
Ontario was the province where the largest dip in retail sales occurred, down 0.9 per cent in February relative to January, followed by the decline recorded in Alberta, where sales dipped 0.6 per cent. It’s worth highlighting, though, that retail sales in Alberta have are up 9.1 per cent on a year-over-year basis.
| ATB Financial
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