January retail sales ‘on fire’

The Canadian economy continues to gather momentum, as retail sales for January came in better than expected.

Statistics Canada says retail sales climbed 2.2% to $46 billion in January, after declining in December. Excluding sales at motor vehicle and parts dealers, overall retail sales gained 1.7% in January.

In a report, CIBC World Markets director Nick Exarhos says, “There’s no other way to say it: Canadian retailers were on fire in January. […] Given what we already know about other sectors in January (manufacturing/wholesale trade), we’re likely headed for 0.4%-0.5% gain in monthly GDP, setting us up for a 3%-plus Q1.”

Looking at individual provinces, Exarhos points to “budding signs that oil-effected provinces are starting to recover.” B.C. leads the pack with 6.6% year-over-year, he says, but other regions are showing positive performance, including Newfoundland and Labrador (3.1%), Saskatchewan (6.0%) and Alberta (4.8%).

Exarhos concludes, “We’re calling for a convergence in provincial growth this year, and the retail numbers are starting to reflect that already.”

Sales in January were up in 10 of 11 subsectors, led by motor vehicle and parts dealers, which gained 3.8%. Sporting goods, hobby, books and music stores fell 0.1%.

Economists had expected a gain of 1.1%, according to Thomson Reuters.

The data follows recent stronger-than-expected results for wholesale and manufacturing sales, trade and job creation.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.