MNI 5 THINGS: Canada Jun Retail Sales -0.2%;Ex Autos,Gas +0.3%>

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the June data 

on Canadian retail sales released Wednesday by Statistics Canada: 

     - MIXED REPORT 

     Retail sales contracted 0.2% on the month, while analysts in a MNI 

survey had expected a 0.4% decline. On a 12-month basis, however, sales 

growth picked up to 3.8% from 3.6%, as sales in June 2017 fell 0.4% on 

the month, providing a positive base effect. Overall, the report was 

mixed, with 6 of 11 subsectors recording lower sales, representing 52% 

of retail trade. An upward revision to May's growth estimate to 2.2% 

from 2.0% provided some offset to the June decrease. 

     - AUTOS, GAS WEIGH 

     While six subsectors posted declines, lower sales of autos and 

parts (-0.7%) and gas (-2.3%) were the major downward contributors. 

     Sales excluding autos and parts edged down just 0.1%, and sales 

excluding gasoline were flat. Sales excluding both categories actually 

increased 0.3%. 

     Building material and garden equipment and supplies (+1.1%) and 

food and beverages (+0.9%) posted the largest gains. 

     - LOWER VOLUMES 

     The picture was similar in volumes, with real sales down 0.3% on 

the month and up 0.7% year-over-year. 

     Gains and losses were recorded in the same categories, except for 

general merchandise stores, which recorded lower real sales (-0.4%), 

while nominal sales were flat. 

     - REGIONAL DECLINES 

     On a regional basis, sales were down in six provinces, led by a 

1.8% decrease in British Columbia. 

     On the other hand, sales in Ontario increased 0.7%, including a 

2.0% gain in the Toronto area. 

     - SALES HOLD IN 2Q 

     Despite the decline in June, the second quarter performance 

improved, with sales rising 1.0% after contracting 0.5% in the first 

quarter. 

     In volumes, more relevant to real GDP, sales recovered 0.9% in the 

second quarter after falling 1.2% the previous quarter. 

     Going forward, consumer spending is likely to continue to 

contribute to GDP, as labor market slack continues to decline and wage 

growth to improve. However, the Bank of Canada expects consumption 

contribution to diminish, while exports and business investment take the 

lead. The slowdown in the housing sector also supports the view of a 

lesser household spending contribution to growth.  

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

[TOPICS: M$C$$$,MACDS$]