June retail sales in B.C. rose to pre-pandemic February levels.
Sales came in at a seasonally adjusted $7.37 billion, up 12.7% from May as more businesses reopened after pandemic closures. Activity has rebounded following a 23% drop in sales from February through April.
Key drivers of the upswing include the release of pent-up consumer demand, a strengthening housing market driving ancillary spending and a lack of spending options on personal services and other entertainment. Federal income support measures have supported spending amidst high unemployment. Year over year sales rose 4.1%, marking the first gain since February.
The strongest gains from May were in the motor vehicle and parts sectors, where sales climbed 20% as consumers made up for lost time, particularly amidst low interest rates. Store reopenings also meant a more than doubling of clothing store sales from May, with year-over-year declines narrowing from 66% in May to 19%.
Sales at food and beverage stores and building materials centres declined, and growth slowed for electronic and appliance and health-related stores as demand normalized following a surge earlier this year.
Year-to-date, retail sales declined 4.6% through June, with a deeper decline of 6.8% in Metro Vancouver.
As with markets across the country, B.C. Multiple Listing Service home sales continued to slingshot higher in July despite high levels of joblessness and the ongoing pandemic. In a clear V-shaped recovery, sales surged for a third straight month, with 33.8% gain from June to a seasonally adjusted 8,441 units, marking the strongest performance since late 2017.Unadjusted sales in July rose 27.6% from July 2019.
Regionally, patterns were similar with sales up across the province. The Lower Mainland-Southwest posted growth of nearly 40% from June and drove the increase given volume of sales, while northern B.C. markets also saw sales rise 45%. Growth in other regions was more modest but still robust. All regions are operating above February sales.
Undoubtedly, a freeze on the spring market upswing likely fuelled a shift in sales to the summer.
Demand has been supported by a number of factors, including less of a labour market hit on higher paid workers, low mortgage rates and a change in preferences due to COVID-19 and work-from-home realities.
Bryan Yu is deputy chief economist at Central 1 Credit Union.
