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Canada Retail Sales seen Plunging as Restrictions Tightened

OTTAWA, May 21 (Reuters) - Canadian retail sales most likely plunged by 5.1% in April, Statistics Canada said on Friday, a fall that analysts said coincided with provincial efforts to fight a third wave of COVID-19.

Statscan also said March retail trade rose by 3.6% from February, thanks in part to higher sales at building material and garden equipment and supplies dealers. Analysts in a Reuters poll had forecast a 2.3% increase.

Statscan cited the “rapidly evolving economic situation” as a reason for predicting the April decline but did not give details. The estimate was calculated based on responses received from 46% of companies surveyed.

“The strength in March seems to have been more than fully reversed in April as much of the country moved back into lockdown,” said Stephen Brown, senior Canadian economist at Capital Economics.

The Canadian dollar, which has been flirting with six-year highs against the U.S. dollar, held onto earlier gains and was trading up 0.1% on the day at C$1.2040 to the greenback, or 83.06 U.S. cents.

Royce Mendes, senior economist at CIBC Capital Markets, said markets were unlikely to react to the preliminary April data since they had already predicted a slowdown.

Statscan said that, based on respondent feedback, 2.1% of retailers were closed at some point in March. The average length of the closure was less than one day.

“This represented a widespread reopening of the economy between the second and third waves of the pandemic,” it said.

Reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; editing by Jonathan Oatis

Source: Reuters


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