Consumer spending stabilized in July, strengthening an economic rebound several weeks in the making, says a report released on Monday from RBC Economics.
The RBC report tracked spending using the bank’s proprietary database of anonymized card transactions by its Canadian clients.
Across most spending categories, consumption remained close to levels from RBC’s previous month of tracking, and were also comparable to last year’s spending levels.
For example, spending on apparel, gifts and jewelry was down just 1% by mid-July compared to year-ago levels, the report said. Also, volumes at household and department and specialty stores remained well above levels seen last year.
Online purchases continued to be robust, especially in certain categories as social distancing continues.
“Even as stores reopened to customers, online and remote spending remained stronger for clothing retailers, restaurants and grocery stores as consumers avoided crowds,” the report said.
However, social distancing continued to negatively affect in-person dining, where spending levels remained 10% below last year.
Spending on larger entertainment venues, such as galleries and museums, also remained low — about 20% below last year’s levels.
In contrast, certain in-person entertainment and health spending — on golf courses and hair salons, for example — have bounced back to pre-pandemic levels.
In travel spending, a slight recovery continued into July, led mostly by car rentals and accommodation. Other forms of travel continued to drag down overall levels, which were about two-thirds below last year, the report said.
Canadians focus on financial responsibilities
As spending recovers, results from a recent poll suggest some Canadians may be more focused on financial responsibility than spending, with younger Canadians especially focused on creating positive cash flow and emergency savings.
In a study of 1,500 Canadians sponsored by Credit Canada, 54% of respondents said paying bills was their top financial priority, and 44% said cutting back on spending took precedence during Covid-19.
Younger respondents exhibited greater financial diligence in certain instances relative to older demographics.
Among 18- to 34-year-olds, 43% said maintaining a positive bank balance at month’s end was a top financial priority, compared to less than one-third (32%) of 35- to 54-year-olds, and 35% of those 55 and older.
Similarly, 40% of 18- to 34-year-olds ranked having emergency savings as a top financial priority, compared to 36% of those in the 35- to 54-year-old cohort, and 30% for those 55 and older.
Angus Reid surveyed a representative sample of 1,500 Canadians who are members of the Angus Reid Forum from July 8 to July 10 for Credit Canada. For comparison purposes only, the sample carries a margin of error of +/- 2.5 percentage points, 19 times out of 20.