* Retail sales down 0.1 pct in March from record-high in
* Car sales biggest contributor to decrease, gasoline sales
(Recasts with analysts' comments, details)
OTTAWA May 22 Canadian retail sales
unexpectedly slipped in March from February on lower car and
clothing sales, adding to growing evidence that economic growth
slowed in the first quarter of this year.
Retailers reported a 0.1 percent drop in sales versus market
expectations of a 0.3 percent gain, with sales dipping to
C$41.07 billion ($37.68 billion) for the month, according to
Statistics Canada data on Thursday.
The sting of the surprise was lessened by an upward revision
of the February sales figure to a record high of C$41.11 billion
from C$41.03 billion previously.
In volume terms, sales decreased 0.2 percent in March.
Consumer spending and the housing market have been big
drivers of economic growth in Canada for the past five years.
"The moderation in retail spending growth through the first
quarter is disappointing though in part it reflects some
intensification of below-average temperatures as the quarter
progressed," said Paul Ferley, assistant chief economist at the
Royal Bank of Canada.
The soft retail performance, which follows weak wholesale
data this week, has prompted economists to downgrade their
forecasts for the first quarter to below 2 percent, annualized.
The Bank of Canada in April forecast 2.5 percent growth in that
But the drag on growth is likely temporary, economists said,
with a rebound seen in the second quarter and the remainder of
"The unleashing of weather-induced pent-up demand should
support moderate spending gains in the months ahead. Supported
by low financing costs and milder temperatures, auto sales in
April climbed to a record for the month," said a note by
The motor vehicles and parts sector was the biggest
contributor to the decrease in March retail sales, falling 0.7
percent. Excluding autos, retail sales were up 0.1 percent.
Clothing and accessories store sales declined 1.4 percent.
Offsetting the weakness was a 0.8 percent jump in receipts
at gasoline stations and a 0.4 percent rise at food and beverage
Decreases were reported in seven of the 11 sectors,
representing 59 percent of retail sales.
In the year to March, retail sales rose 3.9 percent,
One of the most striking details in the retail report was
the contrast between the strong economy and retail sales in the
resource-rich Western provinces such as Alberta and Saskatchewan
versus listless Ontario in central Canada, where manufacturing
has traditionally been the main livelihood.
($1 = $1.09 Canadian)
(Reporting by Louise Egan and Alex Paterson; Editing by Jeffrey
Benkoe and Tom Brown)