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Canadian Wholesale Revenues Fall 0.6% in March
May 20, 2009
Canadian wholesale sales in current dollars fell 0.6% to $40.5 billion in March. Declining sales in the building materials and machinery and electronic equipment sectors were important factors contributing to this decrease. In terms of the volume of sales, wholesale sales were down 1.3%.
Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The larger decline in the constant dollar sales compared with the current dollar sales in March reflects higher prices paid by wholesalers for imported goods. This was due in part to the depreciation of the Canadian dollar versus the US dollar in March.
In March, four out of seven sectors, accounting for two-thirds of total wholesale sales, posted declines.
The building materials sector decreased 3.1% in March, with over two-thirds of that decline coming from the metal products trade group, which fell 9.8%. Sales of the metal products trade group in March were 35.8% below the peak attained in July 2008, dropping to a level not seen since June 2004.
The machinery and electronic equipment sector decreased 1.8%, reflecting declines in the three trade groups: machinery and equipment (-2.6%), office and professional equipment (-1.1%) and computers and other electronic equipment (-0.9%).
The largest increase came in the automotive products sector, which rose for a second consecutive month in March (+2.8%). Sales of motor vehicles increased 3.3%, while sales of motor vehicle parts and accessories rose 1.5%.
Sales in the food, beverage and tobacco products sector rose 1.4%, with all of the gain coming from a 1.9% increase in food products, partially reflecting higher food prices.
By Province In March, three out of four western provinces reported lower sales. Saskatchewan registered the largest decrease (-7.4%), while Alberta fell 3.5%. In both provinces, lower sales in the "other products" and machinery and electronic equipment sectors were behind most of the declines in March.
Wholesale sales in British Columbia fell 4.3%, declining to its lowest level since October 2005. Decreases were most notable in the building supplies and automotive products sectors. In Ontario, wholesale trade rose 1.4%, based on higher sales of automotive products and food.
Inventories Inventories were unchanged in March. Of the 15 wholesale trade groups, 9 reported lower inventory levels, including lumber and millwork (-4.0%), office and professional equipment (-2.1%), metal products (-1.3%) and building supplies (-1.1%).
These declines were offset by increases in inventories of the food products (+1.5%), machinery and equipment (+1.0%), and motor vehicles (+1.7%) trade groups.
The slowdown in sales and unchanged inventories led to an increase in the inventory-to-sales ratio from 1.44 in February to 1.45 in March. This was the highest level since July 1993. The average inventory-to-sales ratio for 2008 was 1.27. The inventory-to-sales ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.