Thursday, September 23, 2010

TD Canada Trust Economic News comments

This is the latest news from TD Canada Trust

Provincial Retail Monitor

September 22, 2010


* Canadian retail sales retreated by 0.1 per cent in July relative to a
month prior. This is in stark contrast with analyst expectations calling for
a M/M gain of 0.6 per cent.

July's performance comes on the heels of a slightly downwardly revised
growth of 0.0 per cent in June (from an initial estimate of 0.1 per cent).

* The weakness was not broad-based at the regional level, with 3 provinces,
namely British Columbia, Ontario and Nova Scotia, reporting declining sales.
The implementation

of the Harmonized Sales Tax (HST) in the former two provinces on July 1st
2010 as well as the 2 percentage point increase in the prevailing HST regime
in the latter province in

July served as major impediments to growth in retail sales.

* Nova Scotia recorded the largest decline at 5.3 per cent. This performance
follows the largest M/M gain recorded in June at 3.3 per cent. British
Columbia and Ontario

experienced M/M declines in sales of 0.4 and 0.3 per cent, respectively in

* On the flipside, Canadian sales excluding British Columbia, Ontario and
Nova Scotia increased by 0.5 per cent. The most significant gain in sales
was observed in Manitoba

at 1.6 per cent, representing this province's third consecutive increase in
the indicator. Quebec experienced a gain in sales of 0.5 per cent after a
string of three consecutive

monthly decreases.

* Relative to July 2009, above-national gains in retail sales were recorded
in the provinces of British Columbia, Alberta and Manitoba. Sales gains in
British Columbia and Alberta come, however, on the heels of earlier
weakness. Sales remain 2.9 per cent and 8.6 per cent, respectively below the
level reached in September 2008 (i.e. the month during which retail sales
peaked at the national level).

* The regional concentration of retail sales declines suggests that HST
played an outsized role in this indicator's performance in July. Data for
provinces not impacted by the implementation or increase in the HST point a
better picture for retail sales at the onset of Q3.

I hope this finds you Happy and Healthy!

All the Best!


A. Mark Argentino
P. Eng. Broker
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