Retail sales gain is lower than expected
After two months of declines, Canadian retail sales rose in February, although it's too soon to celebrate, analysts say.
Statistics Canada reported Thursday that retail sales rose 0.4 per cent in February, with a value of $37.3 billion when adjusted for seasonal fluctuations.
Analysts, however, had predicted a gain of 0.5 per cent for the month, following a 0.4-per-cent decline in January - originally reported as 0.3 per cent.
"Today's data are no reason to pop open the champagne bottle," writes CIBC World Markets economist Emanuella Enenajor. "The headline figure came in slightly weaker than expectations, and with downward revisions to the prior month, the threemonth annualized pace of retail sales is still in negative territory.
"In real terms, the month's 0.4-per-cent gain gives a bit of a boost to the month's GDP numbers but still suggests growth in February should come in more or less flat."
The automotive sector, which has been responsible for gains in other parts of the economy in the first quarter of 2011 - notably wholesale and manufacturing sales - dragged down retail sales for a second month in a row. Enenajor notes that, absent the automotive sector, retail sales gained 0.7 per cent in February.
Sales of motor vehicles and automotive parts fell 0.6 per cent in February, the third consecutive month-overmonth decline.
"The main contributor was a 0.6-per-cent drop at new car dealers," Statistics Canada said. "Lower sales were also reported at automotive parts, accessories and tire stores (down 0.3 per cent) and at other motor vehicle dealers (down 1.7 per cent). The exception was used-car dealers (up 0.5 per cent), where sales increased for the fifth time in six months."
Earlier this week, Statistics Canada reported that Canada's inflation rate rose 1.1 per cent in March, to 3.3 per cent annually. While nine of the 10 sectors measured for the retail sales report advanced in February, the area largely responsible for the increase in the inflation rate was also driving most of the gains in retail sales in February - gasoline, with 1.3 per cent increase in sales due to rising gas prices. Sales of clothing and accessories, also noted in the inflation report, were up 2.5 per cent; and food and beverage sales rose 0.3 per cent.
Ontario contributed the most to the national gain in sales, and Quebec contributed the most to the "dampening" of the sales numbers, Statistics Canada says.
