Following two months of increases, wholesale sales declined 1.2% to $62.0 billion in September, the second decline of 2017. Decreases were recorded in five of seven sub-sectors, led by the personal and household goods and the food, beverage and tobacco.
In volume terms, wholesale sales declined 1.1%.
In the third quarter, current dollar wholesale sales increased 1.5%, while constant dollar sales increased 2.0%. For both current and constant dollars, this marked the sixth consecutive quarterly increase.
September decline attributable to decreases in five of seven sub-sectors
The personal and household goods sub-sector reported the largest decline in dollar terms in September, dropping 4.8% to $8.6 billion. This was the first decline since November 2016 and more than offsets the 3.2% increase in August. All but one industry in this sub-sector reported declines in September, led by the textile, clothing and footwear industry.
Sales in the food, beverage and tobacco sub-sector fell 2.2% to $11.7 billion, a second consecutive monthly decline and bringing the sub-sector to its lowest level since March 2017. While all three industries declined, the decrease in the food industry was the leading contributor to September’s downward movement.
Wholesalers in the machinery, equipment and supplies sub-sector posted a 2.1% decrease in September, to $12.0 billion. This was the second consecutive decline for the sub-sector and the third decrease in five months. Lower sales in the sub-sector were mostly attributable to the farm, lawn and garden machinery and equipment (-10.2%) and the computer and communications equipment and supplies (-3.3%) industries.
Meanwhile, sales in the building material and supplies sub-sector increased 2.6% to $8.9 billion in September, on the strength of gains recorded by the lumber, millwork, hardware and other building supplies industry (+4.9%).
Sales in the motor vehicle and parts sub-sector increased 1.4% to $12.0 billion, led by the motor vehicle industry (+2.2%).
Sales down in eight provinces, led by Quebec and Ontario
Quebec recorded the largest decline of all provinces in September, with sales falling 2.4% to $11.0 billion, their first decrease in three months. Sales were down in six of seven sub-sectors, led by decreases in the food, beverage and tobacco (-3.1%) and the machinery, equipment and supplies (-5.4%) sub-sectors.
Ontario recorded the second largest dollar-value decline in September, with sales decreasing 0.6% to $32.0 billion. Decreases were mainly attributable to declines in the personal and household goods (-6.6%) and the miscellaneous (-2.6%) sub-sectors, and were partially offset by gains in the motor vehicle and parts sub-sector. This was Ontario’s first monthly decline since November 2016.
Sales in British Columbia declined for the second consecutive month, dropping 2.0% to $6.5 billion. Decreases were led by the food, beverage and tobacco (-5.1%) and the motor vehicle and parts (-6.8%) sub-sectors. While sales in British Columbia have declined 3.1% over the past two months, sales remain up 13.1% year over year.
Sales in Saskatchewan recorded a fourth decrease in five months, falling 5.7% in September to $2.2 billion. A 19.2% decline in the machinery, equipment and supplies sub-sector accounted for the majority of the drop. Saskatchewan has recorded the lowest growth rate of all provinces year over year, increasing by 0.7% in wholesale sales since last September.
Alberta was one of two provinces to record an increase in September, rising 0.6% to $6.7 billion. Alberta’s growth was driven by increases in the machinery, equipment and supplies (+2.7%) and the farm products (+42.7%) sub-sectors. In August, Alberta recorded the largest decline among the provinces.
Inventories build up in September
Wholesale inventories rose 0.6% to $81.1 billion in September, the fifth increase in six months. In dollar terms, the machinery, equipment and supplies sub-sector (+2.5%) posted the largest gain, following a 1.2% decline in August. The farm, lawn and garden machinery and equipment (+7.4%) and the construction, forestry and mining (+0.7%) industries contributed the most to the upturn.
The building materials and supplies sub-sector (+3.5%) rose for the second consecutive month, on the strength of higher inventories in the lumber, millwork, hardware and other supplies industry (+6.1%). The electrical, plumbing, heating, air-conditioning equipment and supplies industry also contributed to the increase.
The food, beverage and tobacco (-0.3%) and the personal and household goods (-1.5%) sub-sectors declined for the first time in six months.
Inventories in the farm product sub-sector fell 8.0% in September, a fifth decrease in six months.
The motor vehicle and parts sub-sector fell 1.8% in September after two monthly increases.
The inventory-to-sales ratio increased from 1.29 in August to 1.31 in September. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.
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