Do Canadians spend less?
What Canadians can manage without and what they are not willing to give up.
Consumer spending is one of the most important indicators of economic activity. Despite prices going up and bank interest rates also such spending usually remain unchanged.
According to a Royal Bank of Canada report, residents have recently been spending less on restaurants, cafes, and goods. But they're not cutting back on spending on non-essential services.
What else Canadians aren't willing to give up is vacation. Despite rising prices for airfare, bus transfers and hotels, vacation spending has not declined in the first 3 months of 2023.
The nation's hugest bank notes in its latest survey that overall spending by Canadians was stable in March, but declined for some types of goods. For instance, car sales. DesRosiers Automotive Consultants Inc. reports that for January and February 2023, car sales were CAD 1.7 million, and already in March the figure was CAD 1.59 million.
When adjusted for inflation, restaurant spending fell by 0.6 percent on average in the first quarter of 2023, a relatively small decline. RBC economist Carrie Freestone believes this is a "relatively small decline." RBC's February report found that Canadians are shopping less frequently for groceries, but despite that they are spending about the same amount per trip to the store as before. This is due to spending on goods and services that cannot be classified as basic goods.
- Overall spending remains steady as consumers continue to purchase non-essential services.
- Canadians continue to purchase non-essential services in the same way as before.
- Canadians continue to indulge in holidays despite higher flight prices and hotel costs.
- Canadians continue to cut back on restaurant spending. Meantime, the number of grocery transactions are flat.
- A pullback in auto sales.
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