By Promit Mukherjee
OTTAWA (Reuters) -Canada’s retail sales were up in April on a monthly basis but were below estimates, data showed on Friday, as the momentum seen in the previous months when customers advanced purchases to beat the impact of tariffs continued.
Retail sales in April grew by 0.3% to C$70.11 billion ($51.11 billion) from 0.8% observed in the month earlier, Statistics Canada said, adding sales grew in six of the nine subsectors.
An advanced estimate of sales shows that the number is likely to contract by 1.1% in May.
“Canadian consumers continued to spend in April, but a decline in the May advance estimate for retail sales provides another indication that the economy is heading for a stall in Q2,” Andrew Grantham, senior economist at CIBC Capital Markets wrote in a note.
Retail sales are closely watched by economists and analysts as they give an indication of the trend of the GDP. They had been largely increasing in the previous months as uncertainty around the timing and magnitude of tariffs brought forward purchases.
The sales have started showing signs of decline as tariffs have come into effect and analysts expect that they are likely to go down in the coming months.
Feedback from respondents for April highlighted the effects of trade tensions between Canada and the United States on Canadian retail businesses, the statistics agency said.
“Despite six of nine subsectors posting monthly gains in retail sales, all nine subsectors saw a negative impact on sales,” it said.
Analysts polled by Reuters had estimated the April sales to increase by 0.5% on a monthly basis and 0.2% excluding automotive and parts sales.
StatsCan reported that excluding automotive and parts sales, the number shrank by 0.3% from a drop of 0.8% in March.
The biggest jump in sales in April came from sales at motor vehicle and parts dealers, registering a growth of 1.9%, and was led by sales at new car dealers and used car dealers.
This is the biggest category of sales and contributes over a quarter of total retail sales.
The biggest drop in sales came from gasoline stations and fuel vendors which shrank by 2.7% and were closely followed by sales at retailers selling clothing and accessories posting a drop of 2.2%.
In volume terms, retail sales increased 0.5% in April.
($1 = 1.3718 Canadian dollars)
(Reporting by Promit Mukherjee and Dale Smith; Editing by Alexandra Hudson)
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