BMO has released its holiday spending forecast with both good and not-so-good news for retailers.

In its report, the FI said that the majority of respondents to its survey said their holiday budget would max out at $1,300. Almost half of that amount was allotted to gifts ($613), half again as much for trips ($356) and the rest to entertaining ($203) and miscellaneous ($131).

Interestingly, Atlantic Canadians appear to be the most generous with their holiday dollars, spending an average of $784 on gifts, while Quebecers plan to spend the least at $468.

Forty-eight percent of respondents said they would be spending less this year than they did in 2008, before the recession gained traction; however, 20% said they would be spending more than they did two years ago.

‘Despite low interest rates, the holiday shopping season this year will be a somewhat more subdued affair than last year, though sales growth should remain healthy,’ Sal Guatieri, senior economist, BMO Capital Markets, said in a release. ‘Whereas retail sales rose a strong 4.3% in November/December of 2009 from the same period in 2008, sales are expected to grow a somewhat more moderate 4% this holiday season.’

However, shoppers are hitting the malls early this year, which bodes well for retailers, with 51% of survey respondents stating that they will start their shopping early. Only 14% said they would wait until the last minute.