Consumer pause: Retail sales take a breather in June
Alberta still leads provinces in annual spending growth despite June’s pullback
By Mark Parsons, ATB Economics 23 August 2023 1 min read
A theme this year has been the resiliency of the Canadian consumer amid rising interest rates. In Alberta, this has been especially the case, with retail spending far outpacing other provinces since early 2022 (see chart).
In June, Alberta consumers pulled back on spending, though this only partly reversed May’s increase. Retail sales dipped 0.6% in June to $8.5 billion*, following a 1.3% jump the month prior. Meanwhile Canadian sales were relatively flat (+0.1%) during the month.
June sales in Alberta were weighed down by motor vehicles and parts, which dialed back after May’s spike, and less spending at gasoline stations.
Retail spending in Alberta is leveling off following a run-up in mid 2022 through the first quarter of 2023. Spending in the province peaked in January.
Looking beyond month-to-month volatility, Alberta has been holding its ground over the last year:
- Sales were up 5% over June 2022 - faster than any other province, and bucking the national trend of a 0.6% decline. Excluding the volatile autos and gasoline components, sales were up a solid 8.1% in Alberta.
- In the first half of the year, sales grew faster in Alberta than all provinces except PEI over the same time in 2022: 6.8% vs. 2.2% nationally. Double digit gains were recorded in a range of sectors from autos, to food and beverages, to clothing/shoes/jewelry.
Overall, today’s data point to retail spending leveling off in Alberta. But the solid gains over last year also highlights spending resiliency relative to other provinces, bolstered by strong population and job growth. We expect annual spending growth to slow further in late 2023 and into 2024 as households curtail more discretionary spending in response to higher interest costs.
*Seasonally adjusted data
Answer to the previous trivia question: According to the Canadian Real Estate Association’s Home Price Index, the benchmark price of a single-family home in Greater Vancouver passed the $1 million mark in 2011.
Today’s trivia question: "A Rogue Economist Explores the Hidden Side of Everything" is the subtitle of which bestselling book from 2005?