StatsCan reports surge in retail sales
Automotive industry drives May’s 18.7% boost
Retail sales surged 18.7 per cent in May led by a revving of the automotive industry following COVID-19 shutdowns, Statistics Canada said Tuesday.
The agency says retail sales increased to $41.8 billion in May after steep declines in the previous two months, still leaving them 20 per cent below levels in February, before physical distancing measures were implemented to fight COVID-19.
Economists on average had expected an increase in May of 20 per cent, according to financial markets data firm Refinitiv.
Excluding the automotive sector, sales increased 10.6 per cent.
“At the moment, sales are still being buoyed by the enormous government income-support programs and consumers satisfying pent-up demand, both of which could fade in the second half of the year,” said Royce Mendes, senior economist at CIBC Capital Markets.
Spending on travel as well as recreation and entertainment still remains well below last year’s levels, added Brian DePratto, senior economist for TD Economics.
“Spending patterns are, on balance, encouraging. However, caution remains warranted as employment is still well below pre-pandemic levels, the risk remains of a second wave, and direct income support measures are set to begin expiring early this autumn,” he wrote in a report.
Statistics Canada said about 23 per cent of retailers were closed during the month, with the average shutdown lasting five business days.
Sales were up in 10 out of 11 subsectors with vehicle and parts dealers, general merchandise stores and clothing stores the main contributors to May’s strength.
Food and beverage stores were the only subsector to decrease, losing two per cent to $11.8 billion as supermarket sales fell 4.2 per cent and beer, wine and liquor store sales were down 1.2 per cent.
All provinces and territories contributed to the sales increase, but the recovery was strongest in Quebec where sales grew 33.3 per cent, followed by Newfoundland and Labrador at 25.5 per cent and Manitoba at 24 per cent. Ontario sales were the largest at $14.3 billion, up 14.2 per cent following a 30.9 per cent decrease in April.