Last week, Statistics Canada reported that Alberta’s annual inflation rate jumped to 2.9% in August. And while no one likes paying more for goods and services, thankfully prices for some retail items have been moving in the right direction for consumers.

The average price of women’s clothing in Alberta has fallen 12.4% over the past twelve months, while the average price of men’s clothing has been largely unchanged (-0.2%). Over the same period, footwear prices are down 1.4% and children’s clothing has risen 0.5%.

Over the past ten years, the change in the price of clothing in Alberta has been even more pronounced. Women’s clothing is an average 21% less expensive; men’s clothing has fallen 11%, children’s 21%, and footwear 5%. It’s tough to explain the differential between the change in price between men’s and women’s clothing, but factors like competition and demand probably play a role.

The long-term decline in the price of clothing shows that while prices for some goods tend to rise (think food, shelter and services), prices for many other goods in the basket of consumer items have fallen. The goods that have declined in price tend to be goods that have benefited from more productive manufacturing processes, and are often imported from countries with low cost labour.

But the days of clothing price deflation may be coming to an end. As emerging market countries like China develop and workers earn higher wages, it will be very interesting to see if prices for these goods will still continue to trend downwards over the next ten years.*

*Courtesy of Dan Sumner, Economist, ATB Financial