Canadian retail sales advanced for the third month in a row, growing 0.3 per cent in June. However, the increase in sales was driven almost exclusively by motor vehicle sales. Excluding auto-sales, retail sales managed to eke out a 0.1 per cent gain. BC retailers continue to tread water, with June retail sales recording an increase of 0.4 per cent over May and 2.6 per cent over last year.
BC consumers have been very cautious to start the year and retailers are bearing the brunt of that caution. Retail sales grew only 1.3 per cent year-over-year through June as households have pared back spending in the face of mounting debt burdens. Although we anticipate sales will pick up in the second half, restrained spending will likely cut into economic growth for 2011. We have therefore trimmed our forecast of economic growth this year from 2.7 per cent to 2.5 per cent.