"The Canadian economy looks to have ended the second quarter on a very sour note. The declines in the retail, wholesale and manufacturing activity seen in June were also driven by broader underlying weakness."
- Benjamin Reitzes, an economist at Bank of Montrea
Thursday's data is reinforcing a view it is not the easiest time to be a retailer in Canada, as retail sales across the country dropped by the most this year, due to flooding in Alberta and a construction strike in Quebec, which both disrupted spending, adding to sings the economy shrank during the last month. Sales tumbled 0.6% to 40.1 billion, after touching a record-high a month earlier, and foreshadowing a greater fall in GDP than initially thought. Meanwhile, sales excluding motor vehicles and parts dealers, inched lower 0.8% in the month, after a 1.1% fall in May. In volume terms retailers recorded a 1.2% decline in sales.
Moreover, Canadians also spent less on food and beverages where sales sank 1.2%, posting the largest fall in dollar terms. On the contrary, sales of new cars advanced 0.7%, while sales at gasoline stations ticked up 0.2% on higher gas prices.
Other indicators for July also were disappointing, with wholesale trade falling 2.8%, and manufacturing sales being down 0.5%. The latest figures are undermining worries the economy may have lived through its biggest monthly contraction since 2009 in June, as the world's 11th-largest economy struggles to build steam.
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