Canadian retailers in December recorded the biggest drop in sales in almost three years, as car purchases plunged, suggesting the nation’s economy remained weak at the end of last year.
Sales fell 2.1 percent to C$38.6 billion ($37.9 billion), bringing the value of retailer receipts to the lowest since September 2011, after a revised 0.3 percent gain in November, Statistics Canada said today in Ottawa. The monthly decline was the biggest since April 2010. Economists surveyed by Bloomberg News forecast a 0.3 percent drop.
Today’s release is the last major piece of data before Statistics Canada releases fourth-quarter growth figures on March 1, and adds to evidence the country’s economy probably didn’t accelerate much in the last three months of 2012.
The Bank of Canada projects output increased by a 1 percent annualized pace in the fourth quarter, up from the 0.6 percent pace recorded in the third quarter, yielding the slowest six-month performance since 2009.
Bank of Canada Governor Mark Carney said last month an increase to his 1 percent policy interest rate has become “less imminent” because of a weaker-than-expected economy.
The volume of sales, which excludes the effects of price changes and more closely reflects the industry’s contribution to economic growth, fell 1.6 percent in December.
Automobile and parts sales fell 6.4 percent to C$8.54 billion, the agency said. Purchases at retailers excluding car dealerships fell 0.9 percent. On that basis, economists surveyed by Bloomberg forecast 0.2 percent growth.
Seven of the 11 retail categories tracked by Statistics Canada recorded declines in December, representing 58 percent of total retail trade. Electronics and appliance store retailers reported a 12.1 percent drop in sales. Department stores, sporting goods retailers and home furnishing outlets also posted declines.
Sales in December were 0.7 percent lower than a year earlier, Statistics Canada said. For all of 2012, retail sales were up 2.5 percent from 2011, the slowest since the 2009 recession.