The 2020 Mid-Year Economic Update_long

Canadian Wholesale Sales Decrease 0.4% in February

The building material and supplies subsector recorded the largest decrease.

Canadian wholesale sales declined for a second consecutive month in February, decreasing 0.4 percent to $53.6 billion, their lowest level in six months, according to Statistics Canada. Sales were down in three of seven subsectors, accounting for 51 percent of wholesale sales. In volume terms, wholesale sales fell 0.7 percent.

The building material and supplies subsector recorded the largest decrease in dollar terms in February, down 2.7 percent to $7.4 billion, its lowest level since May 2014. Every industry within this subsector contributed to the decrease, led by a second consecutive monthly decline in the electrical, plumbing, heating and air-conditioning equipment and supplies industry (-5.2 percent).

In the machinery, equipment and supplies subsector, sales decreased 1.3 percent to $11.2 billion, their lowest level in seven months. The decline was attributable to the construction, forestry, mining, and industrial machinery, equipment and supplies industry, which fell 6.2 percent to $3.6 billion, its lowest level since December 2013.

Following an 11.3 percent decline in January, sales in the motor vehicle and parts subsector decreased 1.4 percent to $8.8 billion in February, their lowest level in 10 months. The decline was attributable to the motor vehicle industry, which decreased 2.7 percent to $6.3 billion, its lowest level since April 2014. Imports and exports of passenger cars and light trucks, as well as sales from motor vehicle manufacturers, were lower in February.

Sales rose for the sixth time in seven months in the miscellaneous subsector, increasing 2.1 percent to $7.4 billion. The agricultural supplies industry (+9.3 percent) led the gain with its fifth increase in six months, reaching its highest level since May 2008.

The food, beverage and tobacco subsector rose 0.4 percent to $10.5 billion, a fourth consecutive monthly gain. Higher sales in the food industry (+0.7 percent) more than offset the decline in the beverage industry (-6.6 percent). February's decrease in the beverage industry offset most of the 7.1 percent gain in January.

Sales in the farm product subsector rose 5.1 percent to $721 million, partially offsetting the decline in January.

Wholesale sales declined in four provinces in February, representing 79 percent of total wholesale sales. Ontario accounted for most of the decrease.

In Ontario, sales fell 1.2 percent to $25.8 billion, a second consecutive monthly decline, led by lower sales in the motor vehicle and parts subsector.

In Alberta, sales declined for the second time in three months, down 1.7 percent to $7 billion. The personal and household goods subsector and the building material and supplies subsector contributed the most to the decline.

Sales in Quebec decreased 1 percent to $9.7 billion, the fourth decrease in five months. The machinery, equipment and supplies subsector was one of several that contributed to the decline.

In Saskatchewan, sales rose for the sixth time in seven months, up 7.3 percent to $2.5 billion, the highest level on record, on the strength of gains in the miscellaneous subsector.

Inventories rose for a 14th consecutive month, up 0.6 percent to $70.7 billion in February. Gains were recorded in five of seven subsectors, representing 68 percent of wholesale inventories.

The personal and household goods subsector (+1.9 percent) recorded a third consecutive monthly increase as well as the largest gain in dollar terms.

Inventories in the miscellaneous subsector (+1 percent) rose for the 12th time in 13 months, while inventories in the machinery, equipment and supplies subsector (+0.3 percent) rose for the 12th time in 14 months.

The inventory-to-sales ratio rose from 1.31 in January to 1.32 in February. 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.

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