British Columbia's economy is demonstrating a mixed performance, with retail spending showing resilience while the housing market experiences a significant downturn. Despite a national dip in retail sales, B.C. has seen year-over-year growth, buoyed by domestic demand and tourism. However, the construction sector is facing headwinds, marked by declining housing starts.
Key Takeaways
- Retail sales in B.C. remain relatively robust year-over-year, supported by local demand and tourism.
- The province's housing market is faltering, with a consistent decline in housing starts, particularly in multi-family units.
- While most retail categories saw year-over-year gains, building materials and garden supplies experienced a notable decrease.
- Vancouver's housing starts have seen a significant month-over-month and year-to-date decline.
Retail Sector Strength
Canadian retail sales saw a slight decrease of 0.7% in September, but B.C.'s sales, while weakening by 0.9% in the same month, have maintained a stronger year-over-year performance. Unadjusted sales in the province were up 5.6% compared to the previous year and 6.7% year-to-date. This sustained spending is attributed to local demand and domestic tourism, acting as a buffer against broader economic slack and a softening labor market.
Subsector data reveals varied performance. Motor vehicle and parts dealers saw an 8.6% increase in sales, potentially influenced by tariff pass-through. Health and personal care retailers experienced a 9.2% rise, and sporting goods sales surged by 17.1%. Food and beverage sales grew by 2.6%, and gasoline vendors saw a 2.4% gain. The only category to decline was building material and garden equipment and supplies dealers, which dropped by 6.6% year-over-year.
Housing Market Challenges
In contrast to the retail sector's stability, B.C.'s housing market is showing clear signs of deceleration. Housing starts in the province fell by 5.1% in September, marking the fourth consecutive month of decline. This downturn is primarily driven by a significant drop in multi-family starts, which decreased by 8%. While single-family starts saw a modest increase of 16.3%, they were not enough to offset the broader trend.
The six-month average for housing starts also declined in October. Factors contributing to this slowdown include a weak economy, reduced condominium pre-sales in recent years, moderating population growth, and a challenging real estate market. Vancouver, in particular, experienced a substantial 16.9% decrease in housing starts month-over-month.
Year-to-date figures show a 4% decrease in housing starts compared to the same period last year. Multifamily units are down 3.4%, and single-family starts have declined by 8.7%. While some regional areas like Abbotsford-Mission, Chilliwack, Kamloops, and Victoria saw year-to-date increases, these gains were insufficient to counteract losses in major centers. Nationally, housing starts have grown by 4.5% year-over-year, with multifamily starts increasing while single-family starts have declined.
