Cars give retail figures their first lift in months
OTTAWA–An unusual rise in new car purchases helped spur Canadian retail sales in January to their first increase since September, a greater-than-expected 1.9 per cent, according to Statistics Canada data released yesterday.
The seasonally adjusted increase, the largest since July 2006, was a rare bright statistic after recent bleak Canadian data for wholesale sales, manufacturing, foreign trade, employment, building permits and housing starts.
"Retail trade will thus be one of the few major sectors of the economy to add to growth in January, as almost every other indicator was simply brutal at the start of the year," BMO Capital Markets deputy chief economist Douglas Porter said.
Economists noted the retail sales rise was only a partial recovery from a 5.2-per-cent decline in December, the largest drop in more than 15 years.
Sales were still 5.8 per cent lower than in January 2008.
The value of sales at new car dealers rose 6.4 per cent in January after December’s 15.1 per cent fall.
In a separate release, Statistics Canada said the number of new motor vehicles sold rose 5.5 per cent to a seasonally adjusted 119,231 units in January payday loan. In unadjusted terms, the number actually fell to 78,812 from December’s 97,164.
However, TD Securities economics strategist Ian Pollick pointed out preliminary reports suggest February motor vehicle sales are tracking a 2 per cent decline, setting the stage for a softer February retail sales number.
The automotive sector as a whole, including gasoline sales, rose 3.8 per cent in January. Excluding vehicles and parts, retail sales rose 1.3 per cent in the month.
A Reuters survey of analysts had predicted a 1 per cent rise in retail sales, and a rise of 0.3 per cent excluding autos.
The loonie rose after release of the data yesterday, but ended the day down 12 one-hundredths of a cent as the market concluded it would be unlikely to divert the Bank of Canada from its focus on the broad recession in the economy.
Economists are predicting a slide of 0.5 per cent to 0.9 per cent in January’s gross domestic product, with an annualized decline in first-quarter GDP of around 6 per cent.
Reuters News Agency
Filed under: economics by Forest