Canadian spending showing serious signs of life
With retail sales numbers for October beating expectations with a gain of one per cent, BMO Economics projects that the November-December holiday period will see a positive gain of 3.5 to 4 per cent compared to last year.
“While we are predicting a modest increase during the holiday period, it’s still positive in this uncertain economic climate, and up a towering 14 per cent from the weak levels seen at the pit of the recession in late 2008,” says BMO Capital Markets Deputy Chief Economist Doug Porter.
Porter notes that Canadian spending is still showing serious signs of life despite high debt, downbeat confidence and a drumbeat of negative headlines. “While we expect sales to cool slightly by year-end amid soft job and wage growth, consumers are hardly battening down the hatches.”
“Despite a great deal of uncertainty in the global economy, these sales results bode well for Canadian retailers,” says BMO Bank of Montreal Vice-President for Commercial Banking Cathy Pin. “Our retailers in this country have taken deliberate steps over the last couple years to diversity their businesses and their suppliers, and have worked to broaden their customer base. In return, these changes have put them in a stronger position to take advantage of opportunities this holiday season.”
All provinces except Ontario posted sales increases in October.
The big story regionally is the split between Alberta and Saskatchewan (up 10.4 per cent and 10.6 per cent year-over-year, respectively), and Ontario and Quebec (up 2.6 per cent and 1.9 per cent year-over-year).
The sectors with the most underlying strength include autos and clothing, both reflecting stronger consumer confidence than the polls would suggest.