November 22, 2022 | 09:20
Sales Sink in September
Canadian retail sales declined 0.5% in September, in line with Statcan's flash estimate. Seven of 11 sectors posted decreases, led by gas stations (-2.4%) amid lower prices. Auto sales were flat despite declines in auto dealers. Excluding autos, retail sales were down 0.7%, while sales ex-autos and gas declined a smaller 0.4% in the month.
In better news, StatCan’s early estimate calls for a 1.5% rebound in October. In separate releases today, StatCan published an advance estimate of wholesale trade (+1.3%) and manufacturing sales (+2.0%), suggesting October was likely a solid month for growth.
Regionally, seven of ten provinces posted decreases in September, led by P.E.I (-2.5%) and B.C. (-2.0%).
Retail volumes edged down just 0.1%. Sales volumes declined a hefty 1.4% in the third quarter (-5.4% a.r.), marking the steepest drop since 2008 aside from the initial pandemic shutdown. We will get the full picture on Q3 consumption with next week’s GDP release.
Key Takeaway: Retail sales fell in September; though the drop was smaller in volume terms, real spending took a notable step back in the third quarter, with the biggest decline since 2008 (excluding the pandemic). However, solid advance estimates for retail and manufacturing sales, as well as wholesale trade, point to a recovery in October.