'What's not to like about this economy? There's a lot of confidence'

February 23, 2008
Winnipeg Free Press
Written by: Martin Cash

Manitobans big-time shoppers in '07

MANITOBANS couldn't stay out of the stores in 2007, spending almost 10 per cent more than they did the year before and with an enthusiasm that was almost twice the national growth rate.

Retail spending grew by 9.4 per cent in 2007 in Manitoba, the highest since the current record-keeping style started in 1998 and second in the country only to Saskatchewan, according to Statistics Canada.

Manitoba retailers, from car dealerships to grocery stores to children's stores. posted strong years. Statistics Canada officials acknowledged that much higher gas prices at the pump added incremental growth to the sales number across the board, but there is no denying the underlying confidence of Manitoba consumers.

And it's leading many to have bullish expectations for next year.

"This is all about the strong western economy," said Lanny McInness, Manitoba spokesman for the Retail Council of Canada. "The song remains the same here -- interest rates are low, wages are strong, unemployment is very low and Manitobans are confident as we head into 2008."

McInness said growth might not be as dramatic this year -- Manitobans spent $14.2 billion in 2007 compared with $12.9 in '06 -- but it seems clear that this diversified provincial economy continues to trump the doom and gloom of the subprime debt problems in the United States and uncertainty in the equity markets.

In December, spending was up 10.7 per cent in Manitoba over last year, twice the 5.2 per cent national rate.

"What is not to like about this economy?" said University of Manitoba economist John McCallum. "There are more jobs than there are people to take them, commodity prices are high, interest rates are low. There is a lot of confidence here late in the business cycle."

Customers of local retailers like McNally Robinson Booksellers and A Child's Place flocked to those stores in '07. Paul McNally said even with the higher Canadian price points on many U.S. titles, the Winnipeg booksellers sold more books and increased total sales. Liza Minotti-Barker, manager of A Child's Place in Grant Park Shopping Centre, said the quality children's toy store benefitted from cheaper U.S. imports and the scare about unsafe merchandise from China.

New-vehicle sales were lagging across the country in the fall, but money spent on new and used vehicles in Manitoba in December increased by close to 20 per cent over December '06.

"Even though there was lots of talk about buying vehicles in the U.S., manufacturers made changes to credit and promotional offers, interest rates are low and despite what might be happening in the U.S. economy, things are pretty solid in Manitoba," said Jeff Dveris, co-owner of Park Pontiac and past-president of the Manitoba Motor Dealers Association.

Manitoba's 9.4 per cent increase in retail sales in 2007 was preceded by increases of 4.5 per cent in 2006 and 6.4 per cent in 2005.

martin.cash@freepress.mb.ca

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