Retail gain aids oil-shock rebound
Albertans still scale back spending, but Canadian sales best in a decade
Alberta shoppers continued to scale back spending in February while those in most provinces showed no signs of letting up.
Seasonally adjusted retail spending in Alberta totalled $6.1 billion in February, down 0.4 per cent from January and 1.8 per cent from a year earlier, according to Statistics Canada.
And while sales in Alberta have slowed, the country’s retailers are collectively off to the best start to a year since 2005, it said.
“The Canadian economy is a little more resilient than what we would have expected a few months ago,” said Andrew Kelvin, senior fixed-income strategist at Toronto Dominion Bank.
Consumers are “one of the most stable pillars of support,” he said.
Household spending remains a strong piece of Canada’s recovery from a commodities crash. Low interest rates are supporting purchases of homes and cars, and the pain felt in Alberta’s oilpatch is being met with job gains in manufacturing-heavy regions such as Ontario.
Retail sales increased 0.4 per cent nationally to $44.2 billion despite lower gasoline prices. The volume of retail sales — which factors out price changes — rose 1.5 per cent. Total sales increased 2.5 per cent in January and February, the strongest two-month gain to start a year since 2005.
ATB Financial chief economist Todd Hirsch, in a commentary Friday, said retail sales in Alberta have fared reasonably well given the province’s economic struggles linked to low oil prices.
Sales are off about four per cent over the last complete 12 months compared to the previous one-year period, and eight per cent from the all-time record of October 2014, he said.
“A certain amount of spending is non-discretionary — groceries, for example. Even during a recession, you have to eat. There has probably been a much larger pullback in spending on discretionary items such as clothes and electronics,” he wrote.
Despite a second year of recession, Alberta shoppers still spend more per capita — $1,444 per person — than those in any province, Hirsch said.
A separate StatsCan report showed inflation remained cool last month at 1.3 per cent as cheaper energy prices — compared to a year ago — continued to weigh down the annual rate.
The core inflation rate, which omits some of the most volatile items such as gas pump prices, was 2.1 per cent.
Inflation in Alberta was 1.5 per cent in March, from 1.4 per cent in February. Calgary’s inflation rate remained steady at 1.4 per cent.