Canadian Wholesale Sales Down Slightly in August - Modern Distribution Management

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Canadian Wholesale Sales Down Slightly in August

The machinery, equipment and supplies subsector recorded the largest decrease.
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Wholesale sales were down 0.1 percent to $55.3 billion in August, according to Statistics Canada. Declines in four subsectors, in particular the machinery, equipment and supplies subsector, accounted for the decrease. Higher sales in the miscellaneous subsector partially offset these declines. In volume terms, wholesale sales decreased 0.5 percent in August.

Following two consecutive gains, the machinery, equipment and supplies subsector decreased 2.4 percent to $11 billion, its lowest level since April 2014. The computer and communications equipment and supplies industry (-6.9 percent) led the subsector's decline, more than offsetting the gain in this industry in July. Imports of electronic and electrical equipment and parts were also lower in August.

Following two consecutive gains, the motor vehicle and parts subsector declined 1.2 percent to $10.1 billion. All of the subsector's industries contributed to the decrease, led by the motor vehicle industry (-1.3 percent). Despite the decline, year-to-date sales for the subsector were 7.9 percent higher compared with the same period in 2014.

Sales in the food, beverage and tobacco subsector declined for a second consecutive month, down 0.4 percent to $10.7 billion in August. In dollar terms, the food industry (-0.3 percent) contributed the most to the decline, although all industries in the subsector recorded lower sales.

The miscellaneous subsector rose 4.3 percent to $7.3 billion, its highest level in four months, led by gains in the agricultural supplies industry (+15.7 percent). August's increase offset the preceding three consecutive months of declines in this industry.

Sales in the building material and supplies subsector rose 1 percent to $7.7 billion in August, more than offsetting their decline in July. The lumber, millwork, hardware and other building supplies industry (+3.8 percent) accounted for the gain in August with its third increase in four months.

Sales in the farm product subsector rose 6.9 percent to $690 million, offsetting most of the decline in July.

In August, sales were down in six provinces, which together accounted for 82 percent of wholesale sales. Ontario contributed the most to the decline.

Following two consecutive gains, sales in Ontario decreased 1.1 percent to $27.7 billion. Lower sales in the machinery, equipment and supplies subsector and the motor vehicle and parts subsector led the decline. These subsectors had contributed to the gains in June and July.

Sales decreased for the eighth time in nine months in Alberta, down 0.9 percent to $6.6 billion. The machinery, equipment and supplies subsector was the largest contributor to the decline.

In Quebec, sales were down 0.4 percent to $9.9 billion, a second consecutive decrease. Lower sales in the miscellaneous subsector and the food, beverage and tobacco subsector led the decline.

The machinery, equipment and supplies subsector and the food, beverage and tobacco subsector contributed to lower sales in all three Maritime provinces. Both Nova Scotia, down 2.6 percent to $770 million, and New Brunswick, down 2.3 percent to $528 million, recorded a second consecutive decrease in August. In Prince Edward Island, sales declined 7.1 percent to $60 million following three consecutive gains.

Sales in Saskatchewan rose for the first time in eight months, up 9.3 percent to $2.3 billion, their highest level in four months. The agricultural supplies industry in the miscellaneous subsector accounted for most of the gain. This industry also contributed to the increase in Manitoba, where sales rose 5.8 percent to $1.5 billion.

In British Columbia, sales rose 1.4 percent to $5.4 billion, a fourth consecutive increase, on the strength of gains in the building material and supplies subsector.

Sales in Newfoundland and Labrador were up 11.8 percent to $451 million, mostly offsetting their decline in July. The miscellaneous subsector led the gain.

Inventories rose 0.6 percent to $73.2 billion in August, the highest level on record. Gains were recorded in four of seven subsectors, which together represented 69 percent of wholesale inventories.

Inventories increased for the seventh time in nine months in the personal and household goods subsector (+2.1 percent) and for the eighth time in nine months in the machinery, equipment and supplies subsector (+1 percent).

The food, beverage and tobacco subsector (+0.4 percent) recorded a fifth consecutive gain, while the miscellaneous subsector (+0.2 percent) recorded a third consecutive increase.

Inventories declined for the fifth consecutive month in the building material and supplies subsector (-0.7 percent), which reached its lowest level since September 2014.

The inventory-to-sales ratio rose from 1.32 in July to 1.33 in August. 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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