March Retail Sales in B.C.: The Consumer’s Playground

In a shocking turn of events that can only be described as a plot twist worthy of a daytime soap opera, retailers in B.C. strung together a solid sales gain in March. It’s as if the entire province decided to break out the wallets and have a little spending spree—thanks to the stellar labour market, population growth, and that housing market that keeps giving. Dollar-volume sales jumped a riveting 2.3% from February to a sparkling $6.81 billion, leaving the rest of Canada, which saw growth of just 0.7%, feeling a tad underwhelmed.

But let’s not get too carried away. Sure, B.C. has the highest year-over-year growth among provinces at 8.9%, a spike from a more modest 4.9% in February. Much of the excitement came from a dramatic resurgence in motor vehicle sales after what could only be described as a ‘stunningly dull’ February. It’s fitting that sales at home improvement stores also boomed—because who doesn’t love a good round of DIY after literally buying a car?

And speaking of upside, if you think motor vehicles are the only barometer of financial health, think again! Gasoline sales accelerated 26% year-over-year. But let’s not get too excited—this was largely because prices decided to channel their inner diva and rise dramatically. Meanwhile, year-to-date growth sits at over 6%, with Metro Vancouver showing a somewhat lackluster 5%. The rest of the province flexed its financial muscles with a robust 7.5% rise, all while whispering sweet nothings about better labour market conditions.

Now, let’s talk about the long game. Forecasts suggest annual retail sales will settle at a humble 5% this year, down from the heady heights of over 7% in 2016. Why are we descending? Well, it appears we’ve hit peak vehicle sales. Even after adjusting for retail price inflation—where no one actually wins—real retail spending is projected to grow a thrilling 3%. Because who doesn’t want to feel prudent amid the chaos?

Of course, let’s not overlook the star of the March show: motor vehicle sales! After a nail-biting February dip of 1.7%, March sales jumped up 8.2%. With over 21,200 vehicles sold in a month that set records, it’s like a high-speed chase—but this time everyone is wearing seatbelts. The first quarter’s sales growth is now a paltry 4.3%, but hey, at least it’s something. Just don’t expect this trend to continue—there’s only so much road out there for our rubber-burning friends.

Meanwhile, in the not-so-exciting world of tourism, B.C. is experiencing a crush of international visitors, thanks in no small part to a floundering Canadian dollar and a political landscape that remains strikingly stable. Total visitor entries edged down to a mere 469,785—just a hair under recent highs—while overseas visits took a slight dip. Most shocking of all, U.S. tourist habits remained unchanged. It’s as if they briefly stopped to check their schedules before heading back to their coffee and bagels.

Despite what sounds like a tapering-off in tourism, B.C. is relying heavily on that overseas influx to keep the hype alive. Through the first quarter, tourist visits are still up 1.5% from last year, primarily due to a newfound love affair with Australia, Mexico, China, and India. As for our friends from the U.S.? They’ve taken a 2.7% hit on their visits, but who can blame them? Sometimes the grass is just greener on the other side of the border.

So, what have we learned? While B.C. might have briefly joined the spending party, a few menacing clouds linger on the horizon. But until then, let’s keep those credit cards handy, observe amusedly as the car sales delight, and hope that those tourists remember their passports—because who wouldn’t want a front-row seat to this chaotic economic circus?

—Bryan Yu, deputy chief economist at Central 1 Credit Union.