Home » Canadian Wholesale Revenues Up 4.7% in 2007
Canadian Wholesale Revenues Up 4.7% in 2007
February 19, 2008
Canadian wholesalers reported a sharp decline in sales in December, erasing all of the gains made over the previous months. Despite the drop in December, preliminary figures indicate that wholesalers put in another solid performance in 2007.
Sales fell 2.9% in December to $42.7 billion, ending a string of three consecutive monthly increases. The decline was the largest since April and brought monthly sales to their lowest level since November 2006.
Overall, five out of seven wholesale sectors reported weaker sales in December. The automotive products sector accounted for around half of the overall decline, dropping 8.1% during the month.
Wholesalers outside of the automotive products sector fared little better, falling 1.7% in December. The food, beverage and tobacco products (-3.1%), personal and household goods (-1.9%) and building materials (-1.8%) sectors were among the major contributors to the decrease. The only positive note came in the farm products sector (+1.6%).
Sales in constant prices, which remove the impact of price changes to measure changes in the volume of sales, declined by 3.0% in December.
Full Year 2007 Preliminary figures indicate that wholesalers put in another solid performance in 2007.
Wholesalers sold $520.7 billion worth of goods in 2007, a 4.7% increase over the previous year.
All seven wholesale sectors registered stronger growth in 2007, led by the other products" sector, which consists primarily of wholesalers of agricultural fertilizers and supplies, chemicals, recycled materials and paper products, as well as by the personal and household goods sector.
The automotive sector was the only area to record growth significantly below the national average during 2007.
The increase in wholesale sales was spread across the country, with every province and territory posting gains in 2007. Leading the way among the provinces was Saskatchewan, which rebounded from a flat 2006. Other provinces with growth significantly above the national average included Newfoundland and Labrador, Prince Edward Island and Manitoba.
Central Canada presented a mixed picture in 2007. In Quebec, sales picked up from the previous year while Ontario was held back by the weakness in the automotive sector.
Also worthy of note was the very large increase in Canada's north. Combined sales in the Yukon, the Northwest Territories and Nunavut increased 25%, much of this the result of significant investment in the mining sector. Automotive Sales Tumble Following a 3.9% increase in November, the automotive products sector reversed course in December as sales tumbled 8.1% to $7.4 billion, their lowest level since October 2006. Both trade groups that make up this sector reported significant declines, with motor vehicles down 8.5% to $5.9 billion, and motor vehicle parts and accessories dropping 6.2% to $1.5 billion.
A number of factors likely contributed to the downturn in motor vehicle sales in December. According to the New Motor Vehicle Sales Survey, retail sales were quite weak in November, reaching their lowest level on a unit basis since September 2005 and continuing the recent softening trend that has been evident in the Canadian vehicle market. As a result, dealers likely cut back on their wholesale purchases in December in an effort to reduce their inventory levels.
Another contributing factor was the unusually long shutdowns by Canadian assembly plants in December, the result of both model changeovers and retooling, which would have reduced the number of passenger cars flowing through the wholesale channel. Food Products Pulls Back Sales in the food, beverage and tobacco sector hit their