Alberta sales drop 1.3 per cent
Strong household spending is a big reason why Canada managed to do as well as it did throughout the great recession. But it looks like households are pulling back.
This isn’t necessarily a bad thing, given big debt loads, but if it keeps up this means Canada will have to look elsewhere for growth.
According to Statistics Canada retail sales in Alberta dipped 1.3 per cent in June, to $5.6 billion, with most of the decline attributed to slower automobile sales. Of Canada’s larger provinces, this was the largest monthly decline, with sales in Ontario and B.C. declining 0.3 and 1.0 per cent respectively, while sales increased 0.7 per cent in Quebec. Nationally, retail sales dipped 0.4 per cent.
While wages and consumer prices in Alberta have been increasing over the past couple of years, another big reason provincial receipts are so much higher in 2012 relative to 2011 (receipts in June were 6 per cent higher on a year over year basis) is the jump in inter-provincial migration that occurred over the period. This might foreshadow lower second quarter 2012 migration numbers.
It should be noted that consumer spending in Alberta, while still very important, constitutes a much smaller proportion of economic activity than in other jurisdictions. That is to say, personal expenditures make up 60 per cent of Ontario’s economy and only 43 per cent of Alberta’s. Conversely, Alberta is far more dependent on business investment than other jurisdictions.
| ATB Financial