Albertans are spending, still carry debt: reports

CALGARY As Alberta approaches the one-year mark since the bruising recession ended, a pair of reports released Tuesday suggest consumers are opening their wallets but continue to hold considerable debt.

The province’s retailers posted a record $6.9 billion in sales in June, surpassing the previous high of $6.7 billion reached in October 2014, shortly before plummeting oil prices sent the economy reeling, Statistics Canada reported.

Analysts at ATB Financial said the retail spending surge — which represents an 11-per-cent jump over year-ago levels — appears to show Alberta shoppers “have finally thrown off the recessionary blues.”

Still, the analysts noted the downturn led to a big dip in consumer spending and ended a yearslong rise in retail sales.

If the recession had never happened, and shoppers continued this trend of escalating spending, retail sales would have hit $8.4 billion in June, far exceeding what shoppers actually spent, the analysts forecast.

“So even though retail sales have finally picked up … retailers in Alberta could be forgiven for feeling that they still have a lot of catching up to do,” ATB said.

Alberta’s economy is still limping away from a two-year recession that appears to have ended last fall, according to analysts who cite rising employment, oil production, exports and other improving indicators.

Despite the gains, a separate report by the credit reporting agency TransUnion Canada shows Alberta consumers continue to hold considerably high levels of debt, not counting mortgages.

The report shows consumers owed an average of $27,800 in nonmortgage debt in the second quarter of the year, the highest among the five most populous provinces. It represents a slight increase of one per cent over the same period last year. The rate of consumers failing to make payments on credit cards and other loans for 90 days or longer increased slightly in Alberta, while it fell in the four other large provinces of Ontario, Quebec, B.C. and Saskatchewan.

“There is definitely a concern that delinquency rates are up and are higher than the national average,” said Matt Fabian, director of research and consulting at TransUnion Canada.

But Fabian said the growth of non-mortgage debt appears to be tapering in Alberta, although he’ll need more data from the second half of the year to assess whether a downward trend is underway.