Canadian retail sales declined for a third straight month, falling 0.3 per cent in January. Sales were lower in only 4 of 11 subsectors, with lower sales of motor vehicles and parts contributing to the majority of the decline. Excluding that sector, retail sales were 0.1 per cent higher. In BC retail sales were up 1.5 per cent on a monthly basis in January but were just 2.6 per cent higher year-over-year. In contrast to the national trend, sales of motor vehicles and parts were the largest contributor to gains in BC.
Canadian inflation, as measured by the Consumer Price Index (CPI), registered 1.5 per cent in the twelve months to February, a slight uptick from 1.4 per cent in January. The Bank of Canada's three measures of trend inflation were essentially unchanged, averaging just over 1.8 per cent. In BC, provincial consumer price inflation was 2.2 per cent in the 12 months to February.
With inflation well in-check and meager retail spending growth providing further evidence of a slow first quarter, we expect that the Bank of Canada will remain sidelined for most, if not all of 2019. As a result, lower mortgage rates should prevail in 2019, providing a much needed boost to home sales.
Copyright British Columbia Real Estate Association. Reprinted with permission.