Retail sales set for ‘sizable increase’ despite B.C. floods: BMO

StatsCan’s early estimates indicate retail sales to grow despite supply chain issues

holiday shopping -- chung
Holiday shoppers in Metro Vancouver | Chung Chow, BIV

Canadian retail sales are poised to hold steady even as damage from B.C.’s catastrophic floods continues to choke supply chains across the country, according to early estimates released Tuesday by Statistics Canada.

November retail sales are expected to grow 1.2% compared with a month earlier, when $57.6 billion in sales were tallied in October.

"That’s a sizable increase given the severe flooding in B.C. that month," BMO economist Shelly Kaushik said in a note.

Highways in B.C. have slowly been opening to essential traffic in the weeks since significant portions of routes leading out of Metro Vancouver, home to Canada’s largest port, were washed away in the floods.

Statistics Canada acknowledged its figures will likely be revised owing to their early nature. 

The unofficial November tally is based on responses from 40.9% of companies also surveyed for the official October data, released Tuesday. Statistics Canada’s official data is typically based on a response rate of more than 90%.

Meanwhile, Tuesday’s October data reveals B.C.’s retail sales were up 0.3% on a monthly basis, reaching $8.2 billion. Gains in retail sales in Metro Vancouver were closer to the national average (+1.6%) with spending growing 1.5% to $3.9 billion between September and October.

“Looking ahead, renewed public health restrictions amid the rapidly spreading Omicron variant bring a sense of déjà vu from the last year. Provinces across Canada have been reinstating COVID-19 restrictions, with high-contact services sector industries once again bearing the brunt,” TD economist Ksenia Bushmeneva said in a note.

“Reduced spending on services will likely push spending on goods higher. This in turn could prolong supply chain bottlenecks and inflationary pressures.”

The reintroduction of restrictions in B.C. has been more muted compared with some other provinces, such as Ontario.

Provincial health officer Dr. Bonnie Henry, Health Minister Adrian Dix and Public Safety Minister Mike Farnworth are scheduled to update British Columbians Tuesday afternoon on B.C.’s response to COVID-19.

The inclusion of Farnworth at such a COVID-19 briefing is highly unusual, suggesting more restrictions could be unveiled just ahead of Christmas.