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Special Report

Canada Retail National Report

3Q 2023

Positive Economic Outlook Benefits Retail Sector;
Downtown Properties Face Elevated Vacancy

Canada’s economy has outperformed expectations. In the first half of 2023, the Canadian economy weathered rising interest rates better than expected. The labour market remained in expansion mode, adding roughly 290,000 jobs during the first six months. This strong job creation provided support for consumer spending. Within the first five months, Canadians spent 2.9 per cent more on retail goods and 20 per cent more on restaurant dining compared to a year ago. With robust job growth and consumer spending pointing toward a stronger-than-anticipated economy so far this year, a soft landing against rising interest rates has become more likely. In this scenario, economic growth would slow moderately without a significant rise in unemployment, which should keep the retail sector well positioned.

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