Retail sales in Canada climbed by 1.6% to $57.6 billion in October thanks to rebounding sales of motor vehicles and parts, according to data released by Statistics Canada on Tuesday.
In data captured before the stunning spread of the omicron variant, sales of new cars increased by 2.8%.
But the data was captured before the recent surge of the omicron variant of the coronavirus, which in a matter of weeks and even days has become a major risk to the outlook.
Excluding motor vehicles and parts, spending increased by 1.3% from September.
The increase was a sign that, at least in the auto industry, the supply chain bottlenecks that had crippled so many industries had started to ease. Sales of new cars increased by 2.8% while sales at motor vehicle and parts dealers increased by 2.2%.
But the stunning spread of the omicron variant looms as a threat to these gains in the coming months if nations and industries around the world reimpose economic restrictions that could hurt production.
The spread of the delta variant, for example, led to severe restrictions on production in Southeast Asia during the summer that contributed to the supply chain bottlenecks.
But in Tuesday’s report, at least, there were signs that the Canadian economy had passed the worst of the chip shortages. Retail sales in Ontario, the leading province in auto manufacturing, rose by a strong 1.9% in October.
Overall, spending increased in nine out of 10 provinces and all of the territories in October, suggesting a more even recovery than earlier in the year.
Sales at sporting goods, hobby, book and music stores also had a notable increase of 17.5%. As schools, theaters and sporting leagues resumed in-person activities—openings that may very well be reversed depending on the severity of the omicron variant—spending on arts and sports followed suit.
Perhaps the most encouraging news for Ontario, and for consumers, is that the outlook for the auto industry improved in the final quarter of the year, even as the omicron variant now looms as a major threat.