Retail sales climb 0.4% in Canada despite rising pressures from the Coronavirus pandemic

Statistics Canada released its monthly report on retail sales in January on Friday. The data showed the Canadian retail sales to have climbed in January despite the rising pressures from the Coronavirus pandemic.

The Statistics Department said on Friday that retail sales surged 0.4% in January. In December, Canadian retail sales had posted a smaller 0.2% growth instead. Economists had forecast a slightly lower 0.3% gain in Canadian retail sales in January.

Canadian Retail Sales Record At £43.77 Billion In January

January’s reading for retail sales in Canada recorded at £43.77 billion on Friday and marked growth for the third month in a row. Despite the optimism, experts reiterated that January’s data doesn’t reflect the full extent of the pandemic’s impact on the Canadian economic data. Readings in the subsequent months, they added, are likely to be significantly worse.

Statistics Canada also remarked that January’s increase in retail sales in Canada was largely attributable to improved performance from the motor vehicle and relevant parts dealers. Gasoline stations, it added, also contributed to January’s growth. Both of the aforementioned sectors were previously reported under pressure in December.

The remaining 9 subsectors that make up the so-called core retail sales, collectively noted a drop of 0.3%. According to Friday’s data, sales were upbeat in four out of the total of eleven subsectors that Statistics Canada follows closely. These four sectors make up 48% of the total Canadian retail sales.

Quebec Took The Lead With A 1.7% Increase In Retail Sales In January

If price changes and its associated impact is removed, Canadian retail sales were seen 0.3% down in January in terms of volume.

Friday’s data showed a 1.8% growth in the subsector of motor vehicles and parts in January. Gasoline stations recorded a 1.5% increase in January. Building material, garden equipment, and supplies dealers reported a 4.1% growth in December. In January, however, the sector dropped by 1.6%.

Among the provinces, Quebec took the lead posting a 1.7% increase in retail sales in January followed by Alberta with a slightly lower 1.6% growth. Ontario, on the contrary, took the lead in terms of decline with retail sales recorded 0.8% down in January.  

Statistics Canada also revealed the e-commerce retail sales to have climbed 9.8% in January as compared to the same month last year. At £1.43 billion, e-commerce retail sales made up 3.7% of the total retail trade in Canada in January.

USD/CAD was mostly downbeat in the forex market on Friday. The pair dropped from 1.4495 in the morning session to a daily low of 1.4150. Following the retail sales report, however, the pair recovered back to around 1.43 level where it currently trades.