The 2020 Mid-Year Economic Update_long

Canadian Wholesale Sales Decrease 3.1% in January

Decline to $53.7 billion marks largest drop since January 2009.

Canadian wholesale sales decreased 3.1 percent to $53.7 billion in January, which more than offset the gain in December, according to Statistics Canada. Sales were down in four of seven subsectors, led by motor vehicle and parts. Excluding this subsector, wholesale sales declined 1.3 percent. In volume terms, wholesale sales fell 3.3 percent.

The motor vehicle and parts subsector recorded the largest decline in January, falling 11.3 percent to $9 billion. Lower sales in the motor vehicle industry (-15 percent) accounted for most of the decline, bringing this industry and its subsector to their lowest levels since April 2014. Imports and manufacturing sales of motor vehicles also decreased in January. Retail sales at motor vehicle and parts dealers were down in October, November and December 2014.

Sales in the building material and supplies subsector decreased 5.3 percent to $7.7 billion, the lowest level since May 2014. Every industry posted lower sales, led by the electrical, plumbing, heating and air-conditioning equipment and supplies industry, which fell 9.8 percent in January, offsetting the gain in December.

Sales in the personal and household goods subsector ($7.5 billion) and the machinery, equipment and supplies subsector ($11.3 billion) were unchanged in January. In the personal and household goods subsector, lower sales in the textile, clothing and footwear industry (-4.8 percent) and the home furnishings industry (-8.7 percent) were offset by gains in the other four industries. In the machinery, equipment and supplies subsector, lower sales in the computer and communications equipment and supplies industry (-3.2 percent) were almost entirely offset by gains elsewhere.

Wholesale sales declined in five provinces in January, representing 67 percent of total wholesale sales. Ontario accounted for most of the decrease.

In Ontario, sales fell 5.5 percent to $26.1 billion, offsetting December's gain. Every wholesale subsector declined, led by motor vehicle and parts.

Widespread declines across most subsectors were also recorded in British Columbia and Nova Scotia. Sales in British Columbia declined for the first time in five months, falling 2.3 percent to $5.2 billion, led by lower sales in the building material and supplies subsector. In Nova Scotia, sales fell 11.7 percent to $724 million, the lowest level since April 2014.

After five consecutive monthly gains, sales in Saskatchewan were down 1.8 percent to $2.3 billion. Declines in the miscellaneous subsector and the farm product subsector accounted for the decrease.

Inventories rose for a 13th consecutive month, up 1.3 percent to $70.2 billion in January. Six of seven subsectors, representing 91 percent of total wholesale inventories, posted not only monthly gains but also record high levels in January.

In dollar terms, the largest gain was in the machinery, equipment and supplies subsector (+2 percent), a second consecutive increase.

Inventories grew for a fifth consecutive month in the motor vehicle and parts subsector (+2.8 percent) and a second consecutive month in the personal and household goods subsector (+1.3 percent).

Inventories in the building material and supplies subsector (+0.6 percent) and the miscellaneous subsector (+0.5 percent) both rose for the 11th time in 12 months.

Inventories declined 0.5 percent in the food, beverage and tobacco subsector, following 10 consecutive monthly gains. The inventory-to-sales ratio rose from 1.25 in December to 1.31 in January, the highest ratio since June 2009 when it was 1.34.

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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