Highlights:
- Nominal retail sales rose 0.8% despite a 1.0% drop in motor vehicle and parts sales.
- Sales volumes rose but by a more modest 0.3% as higher prices accounted for much of the nominal increase.
- ‘E-commerce’ sales, not all of which are included in the headline retail sales numbers, surged 42% from a year ago in April and are up 40% year-to-date.
Our Take:
The Canadian economy appears to have continued to improve in April, building on a strong run that has left growth well above its ‘trend’ rate over the last three quarters. The rise in April retail sale volumes – the ninth increase in the last ten months – followed earlier reported gains in wholesale and manufacturing sale volumes. On balance, the data is suggesting April GDP rose 0.2% to build on a 0.5% jump in March even with the fire-related shutdown of a major oil sands producer in April. Strength in household spending is not new with both consumer spending and residential investment at a record share of GDP last year. More encouraging recently have been signs that business investment is also starting to pick up again. Equipment investment rose sharply in Q1 2017 and April machinery import volumes and domestic manufacturer machinery sale volumes are pointing to another, albeit smaller, increase in Q2.
