Canadian wholesale sales rose for the second consecutive month in April, largely as a result of increased demand in the personal and household goods and the machinery and electronic equipment sectors.
Wholesalers sold $43.4 billion worth of goods and services in April for a gain of 1.4%, following a 0.7% increase in March.
In April, five of the seven wholesale sectors reported higher sales, with the only declines coming from the automotive and farm products sectors.
Despite the back-to-back monthly increases, overall wholesale sales have lost a bit of momentum since the second half of 2007 and are still slightly below the peak attained in March 2007. A significant dampening factor has been the slowdown in exports of motor vehicles and lumber.
Sales in constant dollars, which remove the impact of price changes to provide an indicator of volume sales, increased by 1.9% in April.
By Sector The 2.9% increase in the personal and household goods sector was underpinned by higher sales (+5.6%) in the pharmaceuticals trade group, which regained its momentum following two consecutive monthly declines. This trade group continues to be a leading source of growth in this sector.
The personal and household goods sector also benefited from a rebound in demand for apparel (+5.1%), following two months of significant declines. The unusually harsh winter weather in Central Canada, which may have led consumers to delay their purchases of spring clothing, has likely contributed to the recent volatility in this trade group.
The machinery and electronic equipment sector was another major source of growth in April, posting a solid 2.5% increase, similar to the gain in March. A 7.2% increase in the computer and other electronic equipment trade group was the major contributor to the rise in this sector.
Gains in almost all provinces and territories with British Columbia and Ontario leading the way Increases in wholesale sales were spread throughout the country with only Newfoundland and Labrador reporting lower sales in April.
British Columbia saw April sales post their largest increase since June 2007, rising 3.1% to $4.4 billion. This was largely the result of higher sales in the machinery and electronic equipment and the building materials sectors.
Wholesalers in Ontario continued their rebound from a very weak February, registering a solid 1.8% gain in April to $21.4 billion after a similar increase in March. The food, beverages and tobacco products and the machinery and electronic equipment sectors, which were also behind much of the increase in March, were among the major contributors to the April gain.
In Nova Scotia, an increase in demand in the automotive and the building materials sectors was mostly behind the 2.4% increase in April.
Inventories Rise Wholesale inventories rose 0.3% in April to $54.4 billion, after remaining essentially unchanged since the start of 2008.
The trend for inventories has been edging downward for six months, mostly as a result of reductions in the motor vehicle and machinery and equipment trade groups.
The inventory-to-sales ratio fell for the second consecutive month, from 1.27 in March to 1.25 in April. The ratio has remained within a fairly narrow band over the last 12 months.
The inventory-to-sales ratio is an indicator of how many months it would require to deplete current inventories at the existing rate of sales.