Economists and reporters who read a lot of opinions written by economists tend to pay a lot of attention to home sales and to auto sales. I'm sure economists have their reasons for doing so but, as a reporter, here's mine: Activity in those sectors is a good proxy for overall economic activity, for one thing. Here's another reason why these things are imporatn: When consumers are buying homes and cars, they're telling you that they feel confident about their household finances and secure in their employment situation. When they're not buying, you might assume that many consumers don't feel confident enough in their own personal financial situation to take on the debt associated with a new house or new car.
That makes sense, right?
Well, it does until you look at last month's auto sales in Canada.
Auto analyst Dennis Desrosiers crunched the numbers on sales of light trucks and cars (light vehicles for the rest of this post) for the month of July and finds that, compared to the same month last year, sales of light vehicles in the province of Newfoundland and Labrador skyrocketed by nearly 24 per cent to 3,356 units sold. Ok, fair enough, Canada's easternmost province has been on a bit of roll in terms of oil and gas resource and this year, for the first time in a long time, it may actually find that more people are moving to the province rather than moving out of the province — a sign of its newfound economic vigour.
But B.C. has enjoyed strong economic growth in the last year and sales of light vehicles in the most western of provinces is down 10.4 per cent compared to last year at 15,523 units. In Alberta, sales are off nearly 6 per cent last month compared to the same month last year. (Maybe times have been so good for so long out west that everyone who wants a new pickup already has one!)
The number of light vehicles sold in all provinces in July was up five per cent compared to last year.
Dennis is as confused as I am: “Ontario which is suppose to be in a recession with the high dollar is up, yes up, 4.2 percent. Go figure. The other provinces are all over the map.”
Here's the chart of sales of light vehicles, listed by the increase/decrease in percentage terms of units sold in July 2008 compared to July 2007:
Newfoundland: 23.5%
New Brunswick: 17.6%
Quebec: 15.6%
Manitoba: 14.3%
Saskatchewan: 12.3%
PEI: 6.6%
Nova Scotia: 6.4%
Total Canada: 5.0%
Ontario: 4.2%
Alberta: -5.9%
British Columbia -10.4%