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Winnipeg Free Press - PRINT EDITION
Conflicting data on Manitoba's economy
NEW economic data released Friday seem to be sending mixed signals about the Manitoba economy.
The latest consumer price index numbers from Statistics Canada show Manitoba had the second-highest provincial annual inflation rate in the country in August at 1.9 per cent. That's up one notch from July's 1.8 per cent. Rising inflation usually indicates growing consumer demand and an expanding economy.
But at the same time, Manitoba had the biggest provincial decline in wholesale sales in July -- down 3.1 per cent to just under $1.3 billion from $1.34 billion in June.
It was the third consecutive month of declining sales, which is usually a sign of weakening consumer demand and a slowing economy, said University of Manitoba economist John McCallum.
"On the surface of it, it is kind of inconsistent," McCallum said. "If you've got a lower rate of wholesale sales growth, that should speak to less pressure on prices."
He noted Statistics Canada is issuing July retail-sales numbers on Tuesday, and it will be interesting to see what they show. If retail sales are also down, that would be another indication of a slow-down.
As for Manitoba having the highest provincial inflation rate in August, McCallum said 1.9 per cent is still pretty tame. "So I wouldn't want to make too much of it."
He admitted it is a bit puzzling why Manitoba's inflation rate is seven-tenths of a point higher than Canada's, which was 1.2 per cent in August.
Maybe it's partly attributable to changes in last April's provincial budget, which have Manitobans paying provincial sales tax on a wider assortment of goods and services, he said.
-- Murray McNeill
Republished from the Winnipeg Free Press print edition September 22, 2012 B4
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