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article imageRising Car Sales Boost Canadian Retail Sales

By Bob Ewing     Mar 21, 2009 in Business
Statistics Canada has reported that an unexpected rise in new car purchases helped spur Canadian retail sales in January to their first increase since September, a greater than expected 1.9 percent
This is the largest increase since July 2006, and a rare light in another wise bleak week for wholesale sales, manufacturing, foreign trade, employment, building permits and housing starts.
"Retail trade will thus be one of the few major sectors of the economy to add to growth in January, as almost every other indicator was simply brutal at the start of the year," BMO Capital Markets deputy chief economist Douglas Porter said.
The retail sales rise was only a partial recovery from a 5.2 percent decline in December, the largest drop in more than 15 years. Sales were still 5.8 percent lower than in January 2008.
In December the value of sales at new car dealers decline 15.1 percent but rose 6.4 percent in January, 2009.
Statistics Canada, in a separate release, said the number of new motor vehicles sold rose by 5.5 percent to a seasonally adjusted 119,231 units in January. In unadjusted terms, the number actually fell to 78,812 from December's 97,164.
TD Securities economics strategist Ian Pollick noted preliminary reports suggest that February motor vehicle sales are tracking a 2.0 percent decline, setting the stage for a softer February retail sales number.
As a whole, the automotive sector including gasoline sales, rose by 3.8 percent in January. Excluding vehicles and parts, retail sales rose by 1.3 percent in the month
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