The 2020 Mid-Year Economic Update_long

Canadian Wholesale Sales Decrease 1% in May

The motor vehicle and parts subsector recorded the largest decrease.

Wholesale sales decreased 1 percent to $54.5 billion in May, following two consecutive increases. Lower sales in four subsectors, which together represented 65 percent of wholesale sales, accounted for the decline. Excluding the motor vehicle and parts subsector, wholesale sales declined 0.6 percent. In volume terms, wholesale sales were down 1 percent.

The motor vehicle and parts subsector posted the largest decline in dollar terms in May, decreasing 3.1 percent to $9.7 billion following two consecutive gains. The motor vehicle industry accounted for the decline in May, down 4.2 percent following a 12.5 percent gain in April.

The miscellaneous subsector declined for the fourth time in five months, down 3.7 percent to $7.1 billion in May, more than offsetting its gain in April. The agricultural supplies industry (-6.3 percent) contributed the most to the decline, reaching its lowest level in six months. The recyclable material industry declined for the sixth time in eight months, down 5.6 percent to its lowest level in 16 months.

Sales in the machinery, equipment and supplies subsector decreased 1.8 percent to $11.1 billion in May, more than offsetting the gain in April. A third decrease in four months in the other machinery, equipment and supplies industry (-4.6 percent) led the decline. Another large contributor was the farm, lawn and garden machinery and equipment industry (-7.5 percent), which posted its second consecutive decrease. May's decline brought this industry to its lowest level since July 2012.

The personal and household goods subsector recorded a second consecutive decline in May, down 0.4 percent to $7.6 billion, on weaker sales in four of its six industries.

Sales in the food, beverage and tobacco subsector rose 2.3 percent to $10.7 billion in May, more than offsetting the decline in April. The food industry (+2.6 percent) led the gain with its sixth increase in seven months.

In May, sales were down in six provinces, which together represented 86 percent of wholesale sales. Ontario and Alberta contributed the most to the decline.

In Ontario, sales decreased 1.1 percent to $27.2 billion in May, offsetting some of its 3.4 percent gain in April. Lower sales in the motor vehicle and parts subsector and the machinery, equipment and supplies subsector led the decline.

Alberta recorded a sixth consecutive decline, decreasing 2.2 percent to $6.7 billion in May. The miscellaneous subsector and the machinery, equipment and supplies subsector were the largest contributors to the decline. The miscellaneous subsector also contributed to a fifth consecutive decline in Saskatchewan, down 3 percent to $2.3 billion, and to lower sales in Newfoundland and Labrador, down 7.4 percent to $400 million.

Sales were down in Quebec for the third time in four months, declining 0.8 percent to $9.7 billion in May. Lower sales in the motor vehicle and parts subsector led the decrease.

Sales in British Columbia rose 1.2 percent to $5.2 billion in May, on the strength of widespread gains across subsectors. The increase partially offset the decline in April.

Wholesale inventories edged up 0.1 percent to $71.7 billion in May, a seventh consecutive increase. Gains were recorded in four of seven subsectors, representing 56 percent of total wholesale inventories.

Following two consecutive declines, the personal and household goods subsector (+2 percent) recorded the largest increase in dollar terms in May.

Inventories in the food, beverage and tobacco subsector (+1.4 percent) rose for a second consecutive month, while the machinery, equipment and supplies subsector (+0.2 percent) recorded a sixth consecutive increase.

Following two consecutive gains, the motor vehicle and parts subsector (-1.8 percent) recorded the largest decrease in dollar terms.

Inventories declined for the first time in 15 months in the building material and supplies subsector (-0.5 percent). The inventory-to-sales ratio rose from 1.30 in April to 1.32 in May. 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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