Consumer spending will be a big economic driver in 2022: Economist
Retailers in Canada reported fewer sales in September amid supply chain bottlenecks and a reopening of the economy that allowed consumers to spend more on services.
Receipts likely fell 1.9 per cent, a preliminary estimate released Friday by Statistics Canada indicated, after a gain of 2.1 per cent in August -- slightly ahead of a 2 per cent consensus estimate in a Bloomberg survey of economists. The early estimate for September doesn’t provide any details on the reasons for the pullback.
The dip could signal retailers are struggling to meet strong demand because of global shipping constraints and shortage of microchips that’s disrupting automotive manufacturing. It may also suggest consumers have less appetite for hard goods now that they’re free to spend on services that had been prohibited for months like gym memberships and movie tickets.
For August, the 2.1 per cent gain was broad-based, led by higher sales at food and beverage stores, gasoline stations and clothing retailers. Sales at motor vehicle and parts dealers were flat.
“The flash estimates for September aren’t great news for the final month of the quarter, and we’ll be looking to next week’s sneak peak of September GDP to see whether sectors not affected by the auto industry’s challenges were able to offset that weakness,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said in a report to investors.
The statistics agency also revised it July data upward to show receipts fell 0.1 per cent instead of the 0.6 per cent contraction previously reported.