June retail sales inch higher – Tuesday, August 24, 2010 – CBC News

Canadian retail sales were 0.1 per cent higher in June, rising to $35.9 billion. In volume terms, the gain was greater — 0.9 per cent. Lower prices were observed at gasoline stations and new car dealers, Statistics Canada said Tuesday.

A cashier rings through purchases at a supermarket. Canadian retail sales were 0.1 per cent higher in June, Statistics Canada reported Tuesday. (Eric Gaillard/Reuters)

“Looking ahead, further sales gains will likely be modest as income growth remains subdued, households have already cut into savings rates, and consumer confidence is now labouring,” BMO economist Doug Porter said.

Five of the 11 subsectors the data agency tracks were higher. In dollar terms, the largest increase was seen at motor vehicles and parts dealers, where sales were 2.1 per cent higher.

In volume terms, sales rose 5.1 per cent at electronics and appliance stores. Sales in this subsector have been trending upward since October 2009.

The largest decline was at gasoline stations, where sales fell 2.7 per cent, as pump prices were lower. June was the third straight month of sales declines at gasoline stations, after increases for the previous 11 months.

Sales at clothing and clothing accessories stores fell 1.1 per cent, a reversal of the upward trend in the subsector since April 2009.

‘Regional wrinkle’ in N.S.

Regionally, sales were down in six provinces during the month.

Sales declined in all of the Atlantic provinces except Nova Scotia, where they rose 3.1 per cent.

“One notable regional wrinkle was the 3.1 per cent surge in Nova Scotia, as shoppers rushed to beat a two-point hike in the HST at the start of July,” Porter said. “Aside from that province, sales were down fractionally.”

Sales increased 0.3 per cent in Ontario following declines in April and May. Quebec retailers registered a 0.2 per cent sales decline in June, a third consecutive monthly decrease.

Market Update – We have been through a slow spot in the housing market over the past 3 months.  Lots of people are asking why.  There are a few explanations:

Mortgages – activity in our market peaked in April.  It’s no coincidence that is when the government tightened up lending rules and made it more difficult for first time buyers to get into their own homes.

Spring break-up – our local economy is still heavily reliant on the energy sector for employment and economic activity.  Our wet spring conspired to keep the oil and gas sector at home and is still making life difficult.

Low natural gas prices – the majority of central Alberta’s energy activity involves natural gas.  The discovery of effective extraction methods from huge reserves of natural gas locked in shale formations in the US and Canada has drastically increased the supply of natural gas, effectively driving down the price and creating less need for exploration, drilling and extraction.

Population growth – all of the above has contributed to fewer jobs and fewer people moving to central Alberta.  Lower population growth means less demand for housing.

World economic woes – the world economy has been languishing in the last few months as it runs out of the massive amounts of stimulus monies injected by governments and there is uncertainty about future prospects.  Consumer confidence doesn’t do well under a barrage of bad news, but consumer confidence is exactly what we need to get the economy moving again.

THE GOOD NEWS!  We have noticed an increased level of activity in the energy sector lately where it counts – on the roads.  We are hearing numerous stories that oil and gas companies are busy and have work for a year or more.  We are also hearing that they are having trouble finding qualified workers, which means they are probably looking beyond Alberta.  That quite likely means that people will start looking at moving back to Alberta from the other provinces which means population growth and demand for housing.

It won’t happen overnight and we aren’t forecasting a housing boom, but Alberta has always led the way out of Canada’s recessions and we’re likely to do it again.

We think there is the possibility that activity could increase in the fall, helping to stabilize the current supply and demand imbalance.  Interest rates still very low and are not predicted to go up much this fall.

The current environment of great supply, low prices and low interest rates makes buying a home now a very attractive proposition and we believe there is some pent up demand out there just waiting for some encouragement.