All Eleven of Thirteen Provinces and Territories Had Increased Spending in April
Index of Consumer Spending
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).
- 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.
Eleven of thirteen provinces and territories saw increases in their ICS scores in April.
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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.
Updates on this index will be released monthly.
The Index of Consumer Spending’s (ICS) methodology has been revised for releases from January 2024 onwards. The ICS no longer tracks the weekly year-on-year changes in consumer spending. Instead, the ICS now tracks the incremental changes in net transaction volume month-over-month, from a set starting point (April 2022 = 100).
Disclaimer: Forecasts and research often involve numerous assumptions and data sources and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.