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Canadian Wholesale Trade Up In March, Marking 8th Quarterly Increase

Published 2018-05-22, 01:34 p/m
Updated 2023-07-09, 06:31 a/m

Canadian wholesale sales rose 1.1% to $62.8 billion in March, more than offsetting the decline in February. The motor vehicle and parts sub-sector contributed the most to the gain. Excluding this sub-sector, wholesale sales rose 0.2%.

Sales were up in four of seven sub-sectors in March. In volume terms, wholesale sales rose 0.8%.

In the first quarter of 2018, wholesale sales rose 0.5% in current dollars and 0.4% in constant dollars compared with the fourth quarter of 2017. For both current and constant dollars, this marked the eighth consecutive quarterly increase

Higher sales in four sub-sectors

The motor vehicle and parts sub-sector recorded the largest gain in dollar terms, with sales rising 5.0% to $11.8 billion, following three consecutive monthly declines. Lower sales in the other two industries within the sub-sector were outweighed by gains in the motor vehicle industry (+6.6%), where sales rose following five consecutive monthly declines. This was the highest sales level since the record high in September 2017 for both the sub-sector and the industry. Imports of passenger cars and light trucks were up in both February and March.

Sales in the building material and supplies sub-sector increased 3.4% to a record high $9.2 billion. Sales were up in every industry, led by the metal service centres industry (+9.4% to $1.9 billion). Related indicators including imports of metal and non-metallic mineral products and the Industrial Product Price Index for primary ferrous metal products and primary non-ferrous metal products also increased in March.

The personal and household goods sub-sector rose 0.6% to $8.8 billion. Gains in the pharmaceuticals and pharmacy supplies industry (+3.6%) offset declines in other industries.

Sales in the food, beverage and tobacco sub-sector declined for the second consecutive month, down 1.4% to $11.9 billion in March. The food products industry (-1.5%) accounted for most of the decline in the sub-sector.

Sales in the machinery, equipment and supplies sub-sector fell for the second time in three months, down 0.5% to $12.6 billion in March. The computer and communications equipment and supplies (-3.2%) and the construction, forestry, mining and industrial machinery, equipment and supplies (-2.5%) industries led the declines.

On a quarterly basis, the food, beverage and tobacco (+2.0%) and the machinery, equipment and supplies (+1.8%) sub-sectors led the gain in the first quarter of 2018, their second consecutive quarterly gain. The gains in these sub-sectors were attributable to record high sales in January (food) and February (machinery).

USD/CAD for May 21-23, 2018.

Sales up in two provinces, led by Ontario

Sales were up in two provinces in March, which together accounted for 56% of wholesale sales in Canada. In dollar terms, Ontario contributed the most to the gains.

Sales in Ontario rose 2.5% to $32.8 billion in March, on the strength of higher sales in four of seven sub-sectors. This was the largest monthly increase for the province since January 2017. The motor vehicle and parts sub-sector (+7.7%) contributed the most to the gain, following five consecutive monthly declines. The building material and supplies sub-sector (+8.0%) also contributed to higher sales in Ontario with its second consecutive monthly gain.

In Saskatchewan, sales increased for the first time in five months, up 2.5% to $2.1 billion, on the strength of higher sales in three sub-sectors. The gain was led by higher sales in the miscellaneous sub-sector (+11.6%), following a 12.1% decline in February. The agricultural supplies industry contributed the most to the gains in the miscellaneous sub-sector.

Sales were down in Quebec for the fourth time in five months, declining 0.6% to $11.2 billion. Lower sales in the food, beverage and tobacco (-6.2%) and the building material and supplies (-2.5%) sub-sectors contributed the most to the decline. The food, beverage and tobacco sub-sector declined for the first time in 2018, while the building, material and supplies sub-sector decreased for the second time in three months. Despite the decline in March, sales in Quebec were up 0.1% in the first quarter of 2018, their eighth consecutive quarterly increase.

Following three consecutive gains, sales in Alberta declined 0.7% to $6.7 billion in March, led by the machinery, equipment and supplies sub-sector (-2.6%). This sub-sector has declined 4.5% in value over the past two months.

Inventories edge down in March

Wholesale inventories edged down 0.1% in March to $82.6 billion. Decreases in three sub-sectors, representing 32% of total wholesale inventories, were offset by gains in three other sub-sectors.

Inventories in the motor vehicle and parts subsector decreased 1.3% in March, accounting for the largest drop in dollar terms. The motor vehicle industry (-3.0%) was the sole contributor to the decline.

The personal and household goods sub-sector (-0.6%) decreased for the first time in 2018. Lower inventory levels in the personal goods industry (-6.1%) contributed the most to the drop.

Higher inventories in the building material and supplies subsector (+0.8%) were led by higher stock levels in the metal service centres industry (+4.6%).

Inventories in the miscellaneous sub-sector (+0.5%) rose for the fourth time in five months, led by the recyclable material (+16.0%) and agricultural supplies (+1.0%) industries.

The inventory-to-sales ratio decreased from 1.33 in February to 1.31 in March. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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