Slippage Apparent in Canada’s Total Retail Sales
Statistics Canada reports that total retail sales in Canada in June 2008 were +4.0% on an actual current-dollar basis and +3.7% on a three-month moving average basis versus a year ago. These are still quite respectable numbers, although slippage is certainly apparent versus what was being achieved in 2005 through 2007.

However, the numbers are being distorted by the high price of gasoline. For example, year-over-year gasoline sales are +23.6%. Excluding gasoline from total retail sales yields a year-over-year growth rate of only 1.5%, which seems more in line with what one would expect from the economy, based on the fact that a slowdown has crept across the border from the United States.

Weak Auto Sector
High gasoline prices are also part of the explanation for weak automotive sales, both new and used. Car dealers in Canada are reporting current dollar sales declines of 5.2% on an actual basis and 3.9% on a three-month smoothed basis. But this is still nothing like what is occurring south of the border. U.S. new and used car sales are down 10.5% on an actual basis and 9.2% on a smoothed basis.

Construction-related Sales Trending Down, but still Positive

As for construction-related retail sales, the trend for home centres and hardware stores has been downward since the spring of 2006, while still remaining positive. However, this June’s +3.5% figure is a far cry from the nearly +15.0% rate of increase that was being realized two-and-a-half years ago.

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