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Retail sales holding their momentum for now

Retail sales holding their momentum for now

Posted on: 4/20/2018 | Author: ATB Financial's Economics + Research Team

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Alberta's retail sales are demonstrating continued strength in the sector. Sales at the beginning of this year hovered near record highs. February’s total is slightly off the record, with sales reaching $6.7 billion. (This number is adjusted for large swings in the data as a result of seasonal changes.) Compared to the same month one year earlier, total sales were 0.5 per cent higher.

On a per capita basis, Albertans continued to spend more than their provincial counterparts at car dealerships and shopping malls. In February, Albertans outspent the average Canadian by an average of $213 per month, likely the result of a higher employment rate and higher incomes. This difference also emphasizes the strength of the provincial economy after a significant recessionary period.

While this all suggests the province is growing again, Alberta may experience some pullback in spending as the year progresses. In fact, we’re seeing this already. Year-over-year growth has slowed significantly since June 2017 (see chart below).

The slowdown will be driven by a couple of factors, including the fact that many Albertans may still be without work. The province’s unemployment rate was 6.7 per cent in February, much higher than Alberta is accustomed to experiencing. Additionally, higher interest rates and mounting household debt could cause Albertans to rein in spending.

Retail sales, graph

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