After a number of years of sluggish growth, retail sales in BC have made some impressive gains recently. A year ago, retail spending in the province was basically flat. In the second half of 2013 and through the first quarter of this year the retail environment improved, with annual growth in retail sales advancing to around 4%. Over the past three months, spending has accelerated again, climbing to a 7% annualized growth rate.
Using quarterly sales figures, the shift to a higher growth trajectory is clear. One reason for the upturn is a strong gain in new and used vehicle sales (up close to 10%); but even if vehicle sales are stripped out, the growth in retail spending remains near 7%. Among the provinces, BC’s second quarter gain was second to Alberta. This marks a significant turnaround and is obviously good news for BC retailers. It also supports our view that economic growth will be slightly stronger this year compared to 2013. However, until the job market picks up speed and the overall BC economy starts to grow at a faster pace, it’s unlikely that the recent outsized gains in retail sales can be sustained.