Updated: Mon Dec. 21 2009 19:12:58

CTV.ca News Staff

Increased car sales gave the economy a boost, pushing retail sales up by 0.8 per cent in October from the previous month, the eighth consecutive gain in the last 10 months.

Statistics Canada says total retail sales rose to $35.3 billion in October and the amount of sales returned to levels that were last seen during the holiday season in 2008, before sales plunged amid the recession.

The auto sector was the biggest contributor to the larger numbers, with a 3.0 per cent gain overall in October. Sales of new vehicles increased for the sixth straight month, and were up 3.6 per cent. Sales at gas stations also saw an increase of 2.5 per cent, but they still lag behind the peak seen in the summer of 2008, when prices skyrocketed.

The auto industry continues to turn itself around, with October being the first month this year where the value of new car sales was higher than it was in 2008.

BNN's Michael Kane told CTV News Channel that year over year comparison numbers on car sales will grow stronger as Canada leaves the recession behind.

"Sales of cars are (now) pretty much where they were before the worst of the economic downturn started to hit one year ago," he said, explaining people are beginning to spend on cars again after pent up demand.

He said the numbers for other sectors were in line with predictions.

But excluding the help from the auto sector, retail sales actually went down 0.2 per cent in October. Five out of seven sectors dropped.

Clothing stores and building supply stores were the only sectors to see gains, and saw jumps of 1.6 per cent and 1.2 per cent respectively. Clothing stores saw the biggest increase since January.

Shoes, accessories and jewellery had some of the biggest gains with a 2.8 per cent jump.

But sales at grocery stores were down 1.1 per cent, and alcohol sales at beer and liquor stores fell 2.2 per cent after increases in August and September.

"That's a big drop," Kane said.

"What economists tell me is that it shows that discretionary spending was weaker than expected," he said.

Retail sales grew in some provinces in October, with Ontario contributing most to the increase with 1.3 per cent growth. That is the fifth gain over the last six months.

Sales also went up in Newfoundland and Labrador, Nova Scotia, and British Columbia.

But sales stayed flat in New Brunswick and Quebec, and Prince Edward Island saw a decrease of 1.7 per cent.

Kane said Canadians can expect to see better and better sales figures into the first half of 2010.

Comments are now closed for this story

Slewhigh Yendick
@sebastion Leblanc,,, you are SO right!! If the USA can pull themselves out of the recession, Canada will boom again.Sadly there is a socialist president at the helm down there,, he has strapped his people with a commitment at Copenhagen and an unrealistic healthcare bill that will likely be the albatross and the anchor that will likely stop the recovery in its tracks..We should be happy we have a true leader in this country that has shown he will stand in the face of adversity[Copenhagen] and put the needs and wants of his people up front and centre !! I'm thinking about buying a new Chevy,, but I need a job for the winter ,, heading for Mcmurray after Christmas,, rumour has it a new plant is starting up.......

Intelligent Liberal, PhD
This is terrible news since some Canadians might think the Cons are making progress addressing the recession. The cons must be removed from office. Mr. Harper, your time is up! The Liberal Government of Canada needs to appoint its own Ministers so the recession can be dealt with in a better manner.

reece
Is it me or does it seem people have grown optomistic over the littlest things? Good quality jobs are still being lost and being replaced with part time, temporary, low wage full time. The fact that there is an increase of .08 does not mean you go crazy and buy whatever you want. The storm hasn't passed and there are serious concerns that people are choosing to take the path to bankruptcy. If I lost my job, and I believed that at my age there is little hope of recovery, I just might order a few more credit cards, max them all out, go on a nice vacation and then come back and declare bankruptcy. Nobody knows what caused the .08% increase. This blip took place in October. Ummm...look at the month prior - September - 41% increase in bankruptcy over the 3 months ending September and it's climbing. I say it's time to party people, max your cards before they start lowering your credit limit like they have in the USA.

JeffMat
Out of curiosity, if all of these people are spending and these same people didn't get a raise in 2009 and raises will be modest in 2010, how do they pay off their debt?

I know an economy needs people to spend for a recovery, but they do have to pay it back sooner or later.

A lot of conspicuous consumption going on that's for sure....

Imperial Gallon not US Gallon
Sorry Mike, but you fell for GM Canada's marketing slight of hand: 46 miles per IMPERIAL gallon. More like 22 MP/US Gallon city, 32 MPG highway - definitely not close to a Honda Civic. (what they should have done is gone ahead and made the Groove instead of just the Beat and maybe the Trax - Lutz the clutz could have taken away HUGE market share from the KIA Soul, Scion xB and Nissan Cube).Better yet all that money could have gone directly into improving our intercity and commuter rail and all those auto-workers could have been re-employed in locomotive manufacturing industries while improving air quality/pollution levels. Instead the action plan decided to buy doorknobs and pave/repave roads.

Darrell
Auto sales being up are hardly an indicator of our economy rebounding.I know of many familes that had two or three vehicles and sold them to buy one new econimical car which was done to save money.The dealers were giving some great deals on new vehicles but used cars were not selling well. This is fairly unbalanced and I would not get too excited that the worst is over because there was an increase in new car sales.Bottom line is inflation is going to increase and combined with our overvalued real estate and over extended credit, we have a ways to go.The average consumer debt going down will be the true indicator of how soon our economy will rebound for the longer term. Any sales improvement is good news but we must be cautiously optomistic and careful with our spending.

Mike
BTW Rick- GM is paying back their loans early, the autoworkers are glad they have their jobs which wouldn't have been there had Harper not helped out and taxes are pouring into the national coffers. Sounds like it was a wise decision in Harper's part again. On top of that GM seems to be making some pretty good product like the Equinox that gets 46 mpg that's almost as good as a Honda Civic. Pretty good for a 3700lb vehicle! Good on GM. Better late than never.

Mike
@Rick Check how many recessions were in that time frame world or otherwise. The fact we are coming out of a recession, the fact that the market is always the leading economic indicator 6 months ahead of everything else points to good news for 2010 despite some areas which lag. Whether the glass is half full or half empty depends on whether you are a Conservative or a Liberal. NDippers don't even know there is a glass to look at.

Greg in Cambridge
I'm waiting for someone to make a reasonably priced Hybrid/Electric Minivan before I buy another new car. I can't believe that no one in North America has one! Why? I hear Toyota will have one "soon" but when is that? Why not a North American manufacturer?

Gord. Robson, Nova Scotia
Thanks to our hard working Conservative Government we are coming out of the worst economic crisis since the great depression..

Rick in NB, Ste Marie
@ Mike," A Santa Clause Rally ", and 77% of the time no less. I wonder how many " Santa Clause Rallies " we had during a world recession, not to mention the largest since 1952. My question is why involve No Show Harper? It was our money that put the auto sector back to work. It'S easy to make a profit when your overhead is payed for.

Doug @ BC
Interesting. The very first story is about global climate change and our need to do something about it. THEN,we go on to talk about selling more cars,and how that is good news. Perhaps I'm a bit warped this AM, but I fnd that mildy amusing. Silliness aside, it is good news to hear some economic activity that benefits Canadians. We have many challenges ahead,and we will need a more vibrant economy to meet even a modest number of the requests we have placed before all levels of government.More health care,more education,free day care,more food for the hungry,free homes for the homeless,lower taxes (HST)more clean energy projects,more public transit,more funds to fight violence against women,more funds for children in foster care,more funds to fight hunger and disease in poverty stricken countries,more investment to keep our Arctic,more finds to update our military and it's equipment,more funds for First Nations health and education,etc,etc,etc,etc,etc,etc. No,my friends.The sky is not falling.But I would advise people to use this anemic recovery,not to go out and buy more,but to get their debt under proper control.Governments must do the same.We may have taken a step back from the edge of a deep precipice,but a long term recovery is far rom certain.If we do not use this past crisis as a lesson, we are doomed to fail in the future. Cover your butts while you can.There is no way we can morally enrich our lives by spending another dime of our childrens and grandchildrens future income.And the only way Canada can avoid that to learn to compete in global markets.There are still strong protectionisl elements at work in the USA.Markets in Asia will not be easy. Good news today,for sure.But we must get back to work if our legacy is going to be a stronger and sovereign nation.

Sébastien LeBlanc
Finally, a glimmer of hope and guaranteed information that supports the idea of Canada being out or leaving a state of recession. Soon, all will be well if the US can get itself out of recession.

MIke
Like Harper said, we would see a sharp decline followed by a rise and these results confirm that. Analyst Peter Grandich calling today for a "Santa Clause Rally" on the markets which bodes well for Ecometals. The Santa Claus Rally begins five trading days before New Year's Day and ends the second trading day of January. It has occurred 77% of the time 37 of the past 48 years, from 1952 through 2000. It has taken the S&P 500 Index up 1.5% on average since 1952."(From "The Encyclopedia of Technical Market Indicators" by By Robert W. Colby)