Canadian sales rise slightly in April; likely to be hit by effects of wildfires in Northern Alberta

Canada’s retail sales grew 0.9 percent in April after declining 0.8 percent in March, according to Statistics Canada. Retail sales rose to $44.3 billion. Consensus expectations were for retail sales to rise 0.8 percent in April. Increased gasoline prices were the main contributor for higher retail sales. Stripping sales at gasoline stations, retail sales gained 0.4 percent in April. Excluding the price changes effects, especially higher gasoline prices, retail sales, in terms of volume, were quite flat.

The April report, on a dollar value, countered March’s decline. However, the data points towards moderating Canadian consumers as growth is sales has slowed noticeably since January, said TD Economics in a research report. The Canadian economy has been indicating signs of decelerating from the first quarter’s pace of 2.4 percent q/q.

Even if a strong handoff from last year and a strong footing in the first quarter help, wholesale trade, slowdown in exports and the latest retail sales implies that the second quarter growth is expected to be much weaker. As most of the national data is expected to have been impacted further by the wildfires in Northern Alberta, the Canadian economy is expected to have shrunk in Q2 2016, according to TD Economics.

Sales at gasoline stations increased 6 percent, rising for the first time since June 2015. According to the Consumer Price Index, the price of gasoline was up 8.9% on an unadjusted basis in April, its largest monthly gain since February 2015, stated Statistics Canada. Meanwhile, increase was also recorded in other sectors. Sales at furniture and home furnishings stores grew 6.1 percent after declining 4 percent in March.

General merchandise sales grew 1.3 percent in April, while miscellaneous stores recorded a rise of 3.7 percent. Meanwhile, food and beverages stores remained almost flat, growing 0.1 percent, whereas clothing and accessories declined 2.7 percent. Sales of motor vehicle and parts dealers also lost ground, falling 0.3 percent.

Region wise, sales grew in nine provinces out of 10. New Brunswick recorded a rise of 3.1 percent, while British Columbia registered an increase of 2.4 percent. Sales in Alberta were also up 2 percent. The only exception was Manitoba that registered a decline of 0.9 percent due to lower sales at new car dealers.