Saturday, October 27, 2012

BC Economic Snapshot Oct. 27, 2012


VANCOUVER, BC, Oct. 27,2012/ Troy Media/ – August was not a kind month for B.C.’s retail sector as estimated provincial sales slumped to the lowest level in a year. Total current-dollar retail sales volume declined 0.9 per cent from July to a seasonally-adjusted $5.04 billion. Relative to same-period 2011, sales volume was up an anemic 1 per cent.

Price growth in August suggests retailers experienced an even sharper decline in real activity or quantity of product sold during the month. The monthly sales decline was sharper than expected, but consistent with the general erosion in activity observed since the second quarter.
The weak retail environment continued to reflect themes outlined over the past couple of quarters – namely slow population growth, tempered consumer confidence, high debt loads and weak housing markets.

In addition, changes to the duty-free allowance have made cross-border shopping an even more compelling alternative to local purchases, particularly for residents in the southwest region of the province. This has likely siphoned off some activity from local retailers.

The declining trend in retail volume has been driven by electronics and appliances, motor vehicles and parts, and building materials retailers. Meanwhile, modest growth trends reported by home furnishings and health-related retailers seem to have crested.

August’s activity and a downward revision to July estimates pulled year-to-date retail sales growth down to 3.8 per cent, down from about 5 per cent at mid-year. Annual retail growth is expected to narrow through the end of 2012 as economic conditions are unlikely to fuel a substantial rebound.

Expect annual current-dollar retail volumes to grow by about 3.5 per cent to 4 per cent this year, with constant-dollar gains in the 2.5 per cent to 3 per cent range. While higher than 2011, this will still mark a weak year of growth relative to the past decade.
| Central 1 Credit Union

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