“Preliminary data for January indicate that vehicle purchases across Canada began 2008 on a strong note, led by a 27 per cent year-over-year surge in Saskatchewan and Manitoba,” said Carlos Gomes, Scotiabank senior economist and auto industry specialist.

Passenger vehicle sales in Alberta climbed to record 249,000 units in 2007, and are expected to reach a high of 251,000 units this year, up from an average of 194,000 over the past decade.
 
The report predicts that after average annual gains in vehicle sales of nearly 10 per cent since 2005, the increase will moderate to a low single-digit gain, as the deferment of some high profile oil sands projects and deteriorating housing affordability have started to lead to some migration out of Alberta.

Many of the households leaving Alberta are moving to Saskatchewan, lifting the population above one million. This inflow will help the province post the strongest sales gain in 2008, with vehicle purchases expected to reach 45,000 units, the highest level since 1986, and up from an average of roughly 40,000 over the past five years.

Mr Gomes said: “In fact, we expect declining vehicle sales in Central and Atlantic Canada to reduce overall Canadian purchases to 1.61 million units in 2008, down from 1.65 million in 2007, but in line with the 1.60 million-unit average of the past five years.”

“Saskatchewan’s economic outlook is being boosted by record prices for grains, such as wheat, corn and canola, which lifted farm income by 15 per cent in 2007.

“A further double-digit gain is expected in 2008, as global wheat stocks are at a 30-year low. Surging mining activity particularly potash and uranium, is boosting employment in resource extraction, while energy is also supportive.”

After reaching record sales of 197,000 units in 2007, purchases in British Columbia will remain largely flat this year, as strong construction activity is offset by difficult conditions in forestry and in manufacturing, especially wood and paper which account for one-third of overall shipments, and are in the midst of the sharpest decline since the economic downturn of 2001.

Manitoba also continues to enjoy robust construction activity, and is benefitting from high commodity prices, especially nickel. However the slowdown in goods-producing industries which account for 25 per cent of overall employment in Manitoba should pull vehicle sales down to 44,000 units this year, marginally lower than in 2007, but in line with the average since 2003.

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