Canada: Retail sales again below consensus but not entirely disappointing - NBF

National Bank of Canada’s analysts Jocelyn Paquet points out that today’s report on Canadian retail sales disappointed consensus for the third straight month but notes that it was not entirely negative. 

Key Quotes:

“Canada’s retail sales increased just 0.3% in January, disappointing consensus which was looking for a 1.1% print. That result comes after a -0.7% reading in December which was the worst monthly decline observed in 21 months”.

“In real term, Canada’s retail spending was up just 0.1% in January, following a mediocre -0.6% print the prior month.”

“The retail result for January came in below consensus for a third month in row, perpetuating a rather lackluster sequence for consumer spending in the country. In fact, total nominal sales are at the roughly the same level they were back in October.”

“Most of the recent weakness can be attributed to the motor vehicles/parts segment. Sales in that category are down 10.9% in annualized terms over the last three months. Still, January’s report was not entirely disappointing. Sales of electronics, which account for a growing share of total retail spending, registered another healthy advance and are now up 15.2% on their level a year ago.

“Looking at quarterly data, real retail sales are on pace to shrink 0.9% in annualized terms in Q1, a result that may translate into a negative contribution to growth for consumption spending in the quarter.”