RBC Economics Consumer Spending tracker shows robust spending in March with early signs of recovery in the hospitality sector.
- Overall spending continued to improve in March. Year-over-year comparisons are now being heavily influenced by exceptionally weak spending a year ago, but overall spending is still tracking ~2% above February levels on a seasonally adjusted basis by our count.
- Spending on retail products continued to edge higher – the data is consistent with another economy-wide increase in retail spending in March, albeit likely smaller than the 4% bounce-back in retail spending Statistics Canada already reported for February.
- Early indicators pointed to some recovery in the hard hit food and accommodation sectors as containment measures eased. Notwithstanding, there is still a huge spending shortfall in these sectors and we continue to expect that this deficit will not be eliminated until vaccines are distributed to the broader Canadian population.
- Growing optimism among consumers led to broad based increase in spending. Notably entertainment spending and clothing continues to show upward trends.
Virus resurgence has prompted some regions to re-impose containment measures that will once again weigh particularly on spending in the hospitality sector in April. But vaccine distribution is also ramping up, and that is expected to pave the way for less restrictions and more household spending in those hardest-hit sectors over the summer.