Retail sales rise in March, mostly on strength in automotive: StatsCan

OTTAWA - Warmer than usual weather across much of the country helped retail sales rise 0.4 per cent in March to $39.1 billion, more than offsetting February's decline, Statistics Canada said Wednesday.

The gain came as Canadian shoppers jumped the gun on buying spring merchandise, including clothing, footwear, bicycles as well as lawn and garden products, the federal agency said.

But it was auto sales that contributed the majority of the increase. Sales at motor vehicle and parts dealers rose 1.2 per cent, with most of the gains coming in sales of new cars and other motor vehicles, including RVs, motorcycles and boats.

"While balmy temperatures likely coaxed shoppers to vehicle showrooms ... that sector’s winning ways have been going on for quite some time," said CIBC economist Emanuella Enenajor.

"On an annual basis, vehicle sales are up by 10.5 per cent, the fastest pace of sales in any retail category and a marked acceleration in vehicle purchases relative to the pace seen in 2011."

Gains were reported in seven of 11 subsectors, representing 56 per cent of Canada's total retail sales.

Four provinces reported higher retail sales in March, with most of the gains in Ontario, which showed an increase for the fourth time in five months.

Excluding Ontario's 1.2 per cent increase, total retail sales were flat.

Royal Bank economist Nathan Janzen said the report is consistent with its forecast that real consumer spending growth as a whole moderated to 1.6 per cent in the first quarter, a slide from the 2.9 per cent increase in the fourth quarter.

"We continue to expect this slowing, however, will be temporary with still-low interest rates and an improving labour market expected to support a strengthening in quarterly spending growth to a better than two per cent rate for the remainder of 2012," Janzen wrote.

"As well, despite the moderation in consumer spending growth, earlier indications of stronger growth in exports point to overall GDP growth in Q1 still matching the, albeit modest, 1.8 per cent gain in the fourth quarter."