B.C. retail sales advanced during November, counter to the national decline.
Seasonally adjusted retail sales in B.C. rose 0.3% in November over the previous month, while Canada experienced a 0.9% decline overall. Metro Vancouver retail sales rose at a slightly faster pace of 0.5%.
In actual terms, B.C. retail sales increased 0.7% during November over October while Canada posted a 0.6% gain. Metro Vancouver retail sales surged 3.3%. Electronics and appliance stores and clothing and clothing accessories stores powered B.C.’s November gain, but that increase was offset in part by lower sales by motor vehicle and parts dealers, gasoline stations and food and beverage stores.
Year-to-date, B.C. retail sales were up 2.4% compared with same-period 2017. Metro Vancouver sales rose only 0.5% on the same basis, compared with a 4.2% increase in the rest of B.C. Significant sales gains occurred in specialty food stores (14.2%), clothing stores (12%) and home furnishing stores (7.3%). There were fewer sales at furniture stores (-0.9%), motor vehicle and parts dealers (-0.5%) and health and personal care stores (-0.4%).
Retail sales for 2018 are expected to come in about 2.5% higher than 2017, marking the slowest sales gain since 2012. Retail sales rose 9.3% in 2017 and 7.7% in 2016, aided by a strong housing market, which was not the case in 2018. Similarly, slower sales of new motor vehicles in 2018 hurt total retail sales.
The 2019 outlook for retail sales is not bright, with little or no boost coming from housing market activity, lower gasoline prices and range-bound new motor vehicle sales. Nonetheless, consumer demand fundamentals will remain positive with ongoing employment growth and low unemployment, firming wage increases and further population growth. Slightly higher interest rates in 2019 compared with recent years are a small negative for borrowers.
Despite a decline in November, international tourist entries to B.C. remained 7% above last year on a year-to-date basis. Seasonally adjusted international tourist visits fell 1.1% during November compared with the previous month, chiefly because of a decline in the number of tourists from countries other than the U.S. However, non-U.S. tourist entries through November were 8.2% above the same period the previous year. U.S. tourist entries so far this year are 6.4% greater.
The lower Canadian dollar may offset some of the growth slowdown expected in the U.S., China and Europe in 2019, resulting in another year of growth. As long as no economic recession or disruptive geopolitical event plays out, B.C.’s tourism sector will perform well. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.