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Summary
- Canadians spent 35 per cent more on home-building during pandemic
- Spending on transport, leisure activities dropped by over 90 per cent
- Overall spending fell by 2.5 per cent in November
A joint study by Statistics Canada, a Canadian government organization, and the Bank of Canada has shown that Canadians have spent more on shelter, home operations and equipment, health and personal care, and recreational beverages during the COVID-19 pandemic.
The findings shed light on the various matrix of the Consumer Price Index (CPI), a key gauge of inflation and spending habits. The baseline for the survey was the CPI basket weights of December 2018.
Spending On Shelter, Health & Personal Care Rise
In the first three months of the pandemic, starting February, spending on shelter rose by more than 35 per cent, home operation by over 9 per cent, and health and personal care products 3.5 per cent.
A significant increase was also noticed in recreational products, such as alcoholic beverages, tobacco, and cannabis, at nearly 11 per cent.
But spending on transport, and leisure activities, including education and reading, dropped significantly, at 64 per cent, and more than 94 per cent, respectively. However, the percentage difference for the February-May period for all food items in the CPI basket was a negligible 0.73 per cent.
In another report, the Royal Bank of Canada (RBC) noted that a decline in spending had been observed since December 2019, when it was down by 1.4 per cent.
Spending Data to See Decline in 2020
Considering the impact of the lockdowns and harsher restrictions during the Boxing Day sales, spending figures would further drop. It was observed that overall spending in November 2020 fell by 2.5 per cent, as compared to the same period a year ago.
RBC further noted that online spending had risen at record levels, unseen since spring, as the coronavirus cases rose in the second half of the year. Nonetheless, the actual figures would be known when more data is rolled out later this year by the government.
Although spending on air travel and public transport, restaurants, and apparel, etc. continued to see a decline during the pandemic, the monthly food and beverage store sales, post-March, had exceeded the pre-lockdown period of February 2020, Statistics Canada noted.
In contrast, during 2017-2019, household spending rose at a faster pace than inflation, seeing average spending of C$68,980 on goods and services, up by 7.9 per cent from the figures in 2017, it said. Housing, food, and transportation topped their spending list. Canadian households had also spent five times more on mobile phone services.
However, barring transportation, the average spending on shelter, consumer durables, and food products remained the same in 2020.
