(Toronto) Canadians continue to spend on vacations and non-essential services, but are cutting back on dining out and goods, according to a new Royal Bank report.
While overall spending was flat in March, the bank’s latest spending tracking report showed signs of weakness in spending on goods, reflecting a pullback in auto sales.
Economist Carrie Freestone, of the Royal, pointed out that spending on restaurants, excluding the impact of prices, fell by 0.6% on average in the first quarter of 2023.
Consumer spending is one of many economic data points that has remained resilient despite persistent inflation and rising interest rates.
However, Freestone said in an email that Royal expects to see a steeper pullback in discretionary spending once the impact of the Bank of Canada’s interest rate hikes is fully felt.
The February report found that Canadians were making trips to the grocery store less often, but still spending roughly the same amount per trip, while in March the number of grocery transactions was flat.
