Consumer spending increased in the second quarter compared with a year ago, but figures for June point to a slowdown according to a report by credit and debit card processor Moneris Solutions.
Moneris said Wednesday that overall, consumer spending increased 4.67% year-over-year in the quarter, but that the smallest amount of growth, 3.72%, occurred in June.
“While the Canadian economy continued to experience healthy growth in the second quarter of 2012, some signs point to a potential reduction in spending,” said Jim Baumgartner, president and CEO, Moneris Solutions.
“The summer months usually translate into more Canadians attending and spending at national and community events. The level of participation and activity in Q3 will be a good indicator of consumer confidence leading into the holiday season.”
The slower increase in June spending came as consumer confidence also dropped off that month as fears about a global slowdown ramped up amid the European financial crisis and slower Chinese growth.
Economists have also been predicting a slowdown in spending as consumer debt levels are already at all time highs and its expected that Canadians will rein in their expenses.
During the second quarter, the entertainment category saw the highest increase in overall spending, up 9.43%, while hotels and restaurants came in a close second with growth of 6.75% and 6.41%, respectively.
The specialty retail category also experienced strong growth, with stationery (6.62%), florists (6.33%) and pet shops (6.14%) leading the increase in dollars spent.
On the other hand, apparel, a traditionally strong spending category for Canadians, experienced more modest growth with an increase of 2.74%, compared to the same period last year, Moneris said.
Travel showed a modest decrease in spending of 0.49% for the quarter, although for the month of June the survey showed travel spending increased 10.17%.
Elsewhere, consumer spending increased 3.95 per cent in Ontario, 3.52 per cent in British Columbia and 4.92 per cent in New Brunswick.
As for the average transaction amount on credit and debit cards, it remained similar compared to the same period in 2011 _ at $105.77 and $47.52, respectively.
Moneris Solutions is a payment processing solution company that offers credit, debit, wireless and online payment services for merchants across a variety of industry segments. It processes more than three billion transactions annually.
