economy
02. economy The cresting and subsequent adjustment in Metro Vancouver home prices has been accompanied by a tempering of retail spending.
NOT MUCH WIND IN RETAIL’S SAILS
Retail sales are a dependable barometer of economic health, reflecting a medley of changing job prospects, incomes and expectations consumers have about their financial future. Needless to say, rising retail sales figures are generally a good sign for the economy; conversely, falling figures suggest something might be amiss. What, then, to make of Metro Vancouver’s recent retail trends? Since peaking at $1,596 in Q4 2017, monthly per capita retail spending in the region has sagged, having plateaued in the neighbourhood of $1,500 since Q1 2018. Since this peak at the end of 2017, when per capita retail spending in Metro Vancouver was 11% higher than in Greater Toronto and 14% higher than in Greater Montreal, the most recent data show it is now 4% above Toronto and 3% below Montreal. More important than the relative ranking among metros, however, is how recent figures
compare with historical ones here in this region, and why we may be seeing the changes we’re seeing. To answer the first question: since the beginning of 2018 the month-over- month average change in per capita retail sales in Metro Vancouver has been -0.4%. This is a clear downshift in consumer spending from the 0.6% average monthly growth experienced in the 18 months leading up to the peak. The answer to the second—the why—is likely tied to housing market performance (which makes owners feel richer or poorer, depending on the directional change in prices). In the same period since retail sales came off their peak, the benchmark home price in Metro Vancouver increased by an average of 0.2% per month; in the 18 months leading up to the retail peak, it increased an average of 1.4% each month. As we see home prices remaining stable in the near-term, expect retail sales to continue to middle.
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