Canadians are cutting back on restaurants and goods, but continuing to spend on holidays and other non-essential services, according to the findings in a new report from Royal Bank of Canada.

RBC’s latest spending tracker found that while overall spending was steady in March, there were some signs of weakness in goods spending, mirroring a pullback in auto sales.

When adjusted for inflation, restaurant spending fell by 0.6% on average in the first quarter of 2023, a relatively small decline, said RBC economist Carrie Freestone.

RBC’s spending tracker shows that while spending on goods is slipping, spending on non-essential services is still strong.

Freestone said RBC expects to see a more pronounced pullback in discretionary spending once the impact of the Bank of Canada’s interest rate hikes is fully felt.

The central bank paused rate hikes at its most recent meeting in order to let their effects work through the economy. It’s next rate decision is scheduled for April 12.

Consumer spending is one of several economic data points that has remained resilient despite persistent inflation and rising interest rates.

RBC’s February report found Canadians were making fewer grocery store runs but still spending around the same amount per trip.