Consumer spending up 5.53% in Q2

Consumer spending in Canada grew by 5.53% in the second quarter of 2016 on a year-over-year basis, according to a report by Moneris Solutions Corporation. The second quarter of 2015 posted an increase of 6.08%.

“We continue to see consistent, healthy growth, but it is important to continue monitoring contributing factors like consumer confidence, the fluctuating dollar, real estate and foreign markets to get a sense of broader economic trends,” says Angela Brown, president and CEO of Moneris. “We do expect to see spending up in the third quarter as we move into the busy summer tourism season. Additionally, the bars and restaurants category will continue to see growth from special events like the Euro Cup and the Olympic Games.”

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Consumer spending rose by 8.33% in April, 3.88% in May and 4.64% in June, compared to the same three months in 2015.

Spending increases were lower in the provinces that have experienced economic downturns due to the decline in oil prices. Alberta was the only province to show a decrease this quarter, with spending down by 2.9%. Saskatchewan and Newfoundland saw small increases of 0.99% and 2.3%. Ontario posted the largest increase (8.35%) followed by Prince Edward Island (8.11%).

Credit card spending increased by 7.6% year over year, holding a 64.84% share of purchases made. Debit sales rose by 1.9%, representing a 35.16% share of total card spending.

Fort McMurray: charitable giving up

Charitable donations increased by 21.08% year over year. The biggest increase was seen in May (59.99%), as Canadians responded to the wildfire in Fort McMurray, Alta., which began on May 1.

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“The significant increase in charitable giving coinciding with the fires in Alberta shows how deeply moved Canadians across the country were by the devastating wildfires, and how willing they were to help those affected get back on their feet,” says Brown.

While giving increased, spending in Alberta dipped in May, posting a 4.75% decrease year over year.

Increase in tourism spending

Spending on foreign cards increased 9.49% year over year, with the continued low Canadian dollar providing tourists a favourable exchange rate. Cards from the U.S. drove the highest foreign spend volume during the quarter, and saw a 10.61% increase over 2015 – nearly double the overall rate of increase.

Contactless payments

Canadians continued to embrace the speed, convenience and security of tapping their cards and smartphones in the second quarter; contactless spending increased in volume by 162.56% and the number of contactless transactions increased by 95.6%, compared to the same period in 2015. Canadians also spent more per tap – the average contactless transaction size increased by seven dollars.

Staff

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