Canadian retail sales record fifth gain in last six months in June

Canadian retail sales rose one per cent in June, the fifth gain in the last six months, and a boost economists say proves the recession is over.

Canadian retail sales rose one per cent in June, the fifth gain in the last six months, and a boost economists say proves the recession is over.

Statistics Canada said Monday that retail sales hit $34.4 billion in June, higher than expected. Adjusted for inflation, retail sales were up 0.4 per cent compared with May.

Gasoline was the biggest driver, with sales at the pump rising 4.7 per cent in June compared with May, due largely to higher prices. Auto sales were up 2.1 per cent.

StatsCan said overall retail volume was up 0.4 per cent from May, with sales rising in six of eight sectors.

It’s the second-straight month of gains, with May’s retail sales rising by 1.1 per cent from April, when sales fell by 0.7 per cent.

“Gains in retail sales add further weight to growing evidence that Canada’s recession ended in June,” said CIBC World Markets economist Krishen Rangasamy.

“Gains in retailing were broad-based, with June’s one per cent advance buoyed not only by prices but more importantly by volumes.”

Rangasamy noted that all provinces saw retail gains in June, with the exception of New Brunswick, where sales fell 0.2 per cent.

Manitoba and Saskatchewan saw the strongest sales growth at 2.8 and 2.3 per cent respectively.

Ontario sales grew by a mere 0.1 per cent compared with May, beat only slightly by Prince Edward Island which saw sales up 0.2 per cent, while British Columbia was up 0.7 per cent.

Sales in Nova Scotia and Newfoundland were up 1.8 per cent and one per cent respectively. Quebec’s sales rose 1.8 per cent and Alberta’s 1.3 per cent.

The June figures across Canada mean higher-than-expected second-quarter retail sales across Canada, “lending credence to the ’end of the recession in Q2’ call by the Bank of Canada,” said Andrew Pyle, an investment adviser at Scotia McLeod in Peterborough, Ont.

In July, Bank of Canada Governor Mark Carney declared the recession over, but also warned that the economy would emerge smaller and with a reduced output potential.

Canada has had three quarters of economic shrinkage — two successive quarterly declines is a technical definition of recession — so expected growth in the current summer quarter means the recession is over.

That said, employment growth is expected to lag and further job cuts are expected for several more months, which could keep retail sales low.

CIBC’s Rangasamy said June’s increase in sales volumes will be a boost to Canadian gross domestic product for the first time in 11 months. GDP is a key economic measure that shows the amount of goods and services produced over a specific period.

Rangasamy believes the GDP grew by 0.3 per cent in June. Official GDP figures are set to be released next Monday.

“This stronger-than-expected retail sales report points to the release of pent-up demand and likely much support from fiscal stimulus and lower prices,” Derek Holt and Karen Cordes of Scotia Capital said in a note Monday.

However, they said the “good news” is overstated because of higher prices for items such as gasoline and food. Food sales were up 1.3 per cent in June, while prices were up one per cent.

When volatile sectors such as autos, food and gasoline are excluded, sales were actually flat, they noted.

“Notwithstanding this effect, however, the price-adjusted volume of sales also increased by a respectable 0.4 per cent and that will be a boost to Canadian real GDP on the month,” they noted.

Holt and Cordes also said Ottawa’s Home Renovation Tax Credit, introduced in January to stimulate spending in certain parts of the economy, wasn’t enough to boost building and outdoor home supplies sales, which fell 0.6 per cent in June from May.

General merchandise stores sales fell 0.6 per cent and so-called miscellaneous retailers saw sales fall by 1.2 per cent.

Just Posted

Alberta hiring more paramedics and buying new ambulances, none for Red Deer

Red Deer Mayor Tara Veer is not concerned the provincial government didn’t… Continue reading

‘My nightmare began again’: Close call as bus carrying Humboldt crash survivor rear-ended

CALGARY — A terrifying ordeal for Humboldt Broncos survivor Ryan Straschnitzki this… Continue reading

Halifax airport operations normalize after Boeing 747 runway overshoot

HALIFAX — The Halifax Stanfield International Airport has resumed normal operations a… Continue reading

Bentley family left without a home grateful for community support

Central Albertans are coming together to support a Bentley family left homeless… Continue reading

Red Deer RCMP ready for new mandatory alcohol screening law

Red Deer RCMP are ready to enforce a new law intended to… Continue reading

WATCH: Red Deer and District Kennel Club Dog Show at Westerner Park

The Red Deer and District Kennel Club is holding a dog show… Continue reading

Pence aide out of running to be Trump’s next chief of staff

WASHINGTON — President Donald Trump’s top pick to replace chief of staff… Continue reading

Swath of South faces wintry mess: Snow, sleet, freezing rain

CHARLOTTE, N.C. — A massive storm brought snow, sleet, and freezing rain… Continue reading

‘I killed my best friend’: Opioids’ fatal grip on mayor, pal

MOUNT CARBON, Pa. — Janel Firestone found her son — the 24-year-old,… Continue reading

Brothers, 20, face second-degree murder charge in death of teen: police

MISSISSAUGA, Ont. — Police west of Toronto say two brothers have been… Continue reading

A young mayor, his friend, and a fatal attraction to opioids

MOUNT CARBON, Pa. — Janel Firestone found her son — the 24-year-old,… Continue reading

GM fights to retain key tax credit amid plant closing plans

WASHINGTON — General Motors is fighting to retain a valuable tax credit… Continue reading

TTC union asks provincial government to step in on transition to Presto

TORONTO — The union representing transit workers in Canada’s most populous city… Continue reading

Small pot growers find roadblocks on path to microcultivation licences

Yan Boissonneault’s daughter was turning blue. Without warning, his baby had stopped… Continue reading

Most Read