After rising gas prices boosted spending in October, Canadian retail sales dipped slightly in November.
In the past month, retailers’ receipts decreased by 0.5%, according to a preliminary estimate issued by Statistics Canada on Tuesday. This reduced the 1.4% growth in October, which was the biggest gain in five months and was mostly driven by increases in gas station and grocery store sales.
A 1.5% increase in October sales was predicted by both the statistics agency’s forecast and the median estimate of economists polled by Bloomberg. Retail sales up 1.7% when auto and parts were excluded, outpacing the 1.3% increase predicted by economists.
Retail sales in volume terms remained constant in October due to increasing fuel prices offsetting declines in the furniture, electronics, and clothes industries. Approximately half of the rise in October’s spending was attributed to gasoline sales.
Housing Sales
In view of high inflation and rising borrowing rates, which have already begun to put a strain on many households, the research underlines a certain loss of impetus in domestic demand for products. Consumers are anticipated to reduce their spending even more since the economy is predicted to slow down significantly in the coming months.
Regarding the November figure, which is based on replies from 42.3% of the enterprises polled, the statistics agency withheld more information.
Sales increased in six out of the 11 subsectors in October, accounting for 84.4% of the retail trade.
According to CREA data, sales decreased in 60% of domestic markets in November, with decreases of 15.3% in the Greater Vancouver Area, 13.8% in Victoria, 12.1% in the Niagara Region of Ontario, and 11.9% in Regina.
According to Shaun Cathcart, senior economist at CREA, “November’s housing data from across Canada came in as expected — still relatively quiet — and that is unlikely to improve this winter with the Bank of Canada raising rates again last week.” It will be intriguing to observe what purchasers do when listings begin to appear in large numbers in the spring, and even more interesting to see what transpires a little later when the Bank of Canada, widely believed to be at or very near the peak of its tightening cycle, starts to gradually drop rates.
The MLS Home Price Index fell by 4.4% from November 2021, while real average prices fell by 12% to $632,802 in November, a decrease of 1.8% from October.
While annual transactions were down 38.9% from a close to record in November 2021, the monthly fall in sales offset a modest uptick reported in October.
Robert Kavcic, economist at Bank of Montreal, noted that the present market is the most buyer-friendly since 2012 despite a steep decline in national transactions.
Kavcic wrote in a note to clients, “Still, the market balance fell further in the month, with the sales-to-new listings ratio dropping to 49.9% in November.” “That makes for the most benevolent level for buyers since
Cailey Heaps, a realtor in Toronto, thinks that the main reason why national sales are down is that consumers are risk-averse looking into 2023, on a looming recession and further increases in core consumables and energy prices, so consumers are already battening down the hatches.
