Dec. 19, 2014 10:24 a.m. ET
OTTAWA--Canadian retail sales stalled in October as consumers spent more on building materials, electronics and appliances, and food, but curbed spending on cars and gasoline.
The value of retail sales was unchanged from a month earlier at 42.85 billion Canadian dollars ($36.95 billion), following an unrevised 0.8% rise in September, Statistics Canada said Friday. Sales volumes--a key indicator of the sector’s contribution to economic output--were also flat.
The results beat expectations, which were for a 0.2% decline in the value of retail sales, according to a report from Royal Bank of Canada.
Sales excluding the auto sector climbed 0.2%, marking the first and largest increase since June.
The flat reading on retail sales volumes came on the heels of volume declines in wholesale sales and manufacturing, and pointed to a weak growth performance for October.
Statistics Canada will release the month’s gross domestic product report on Dec. 23.
TD Securities said the data leaves monthly GDP tracking at a 0.1% rate and said it expects growth to slow to 2.4% in annualized terms in the fourth quarter from 2.8% in the third quarter.
Given the plunge in oil prices in the fourth quarter and the savings to consumers from cheaper gasoline costs, it will be “interesting” to see if they spend more of their disposable income on other goods, Mazen Issa, senior Canada macro strategist at TD Securities, wrote in a report.
Sales excluding autos and gasoline stations rose a decent 0.4% in October.
The October figures may be an early indication of better consumer spending through the fourth quarter and early next year as energy prices are expected to remain muted, Mr. Issa said.
“That, along with a weaker currency (which will help sustain export sales), would act as potent offsets to what will be a negative impact on broader investment for the oil and gas sector,” he wrote.
Write to Nirmala Menon at nirmala.menon@wsj.com
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