Eleven of Thirteen Provinces and Territories Had Increased Spending in April: Index of Consumer Spending—June 2024
Consumer and Business Confidence, Courtesy The Conference Board Of Canada
Author: Walter Bolduc, June 17, 2024
The Index of Consumer Spending (ICS) increased to 112.4 points in April, a 7.6-point increase from March (the month of April 2022 = 100). This online experience highlights the average increase in spending among Canada’s provinces and territories. We share our findings for the month of April, considering the situation in each province and territory.
Eleven of 13 provinces saw increases in their April ICS scores. Which regions saw the largest increase and which the smallest? What are the main reasons for the overall increase in the index?
Has the addition of more jobs in April impacted the index?
- Eleven of thirteen provinces and territories saw increases in their ICS scores in April. Saskatchewan had the biggest change, improving 14.1 points to 109.3. Saskatchewan was followed by Manitoba, which gained 12.4 points to move to 118.9. The two drops occurred in the Northwest Territories (down 5.0 points to 117.7) and Nunavut (down 6.3 points to 108.0).
- Population growth helps explain some of the increase in the index. Canada has continued to see a strong inflow of immigrants. This influx is boosting the landscape for the national spending level, despite ongoing weakness in per capita terms. Saskatchewan and Manitoba each saw their populations increase by a couple of thousand residents, which has helped boost spending.
- Since the start of the year, Manitoba has suspended its 14 cent per litre gas tax. The pause may be contributing to the province’s index gain with the lower cost of fuel influencing residents’ travel and leading to more discretionary spending in other areas of its economy.
- 90,000 jobs were added in April. With the increase, employment sat at 20,491,000. The strong employment picture is naturally supporting the index, which is up 3.9 points in April compared with the year prior.
- Wage growth is currently outpacing inflation. In April, year-over-year real wage growth (wage growth minus inflation) was 2.0 per cent. The Atlantic provinces had increases in their minimum wages that took effect April 1. This could have also created a small income effect and increased spending.
- The Bank of Canada held its policy interest rate at 5.0 per cent during April’s announcement. The higher rates have limited spending for households. We anticipate rate cuts to begin in the early summer, which would be supportive of consumer spending.
The Index of Consumer Spending is powered by exclusive consumer transaction data provided by Moneris Data Services. Moneris is Canada’s number one payment processor with over 3.5 billion transactions spanning more than 325,000 merchant locations. Our index tracks incremental changes in net transaction volume month-over-month from a set starting point (April 2022 = 100), enabling us to gauge economic activity levels across the country and provide insights into how the Canadian economy is performing coast to coast.