The 2020 Mid-Year Economic Update_long

Canadian Wholesale Sales Up 1.5% in July

Sales were up in five of the seven subsectors.

Canadian wholesale sales rose 1.5 percent to C$62.4 billion (US$50.6 billion) in July, following a 0.6 percent decline in June, according to Statistics Canada. Sales were up in five of the seven subsectors, representing 86 percent of total wholesale sales. The building material and supplies and the food, beverage and tobacco subsectors contributed the most to the advance.

In volume terms, wholesale sales were up 2.1 percent.

The building material and supplies subsector reported the largest gain in dollar terms in July, increasing 4.8 percent to C$9 billion (US$7.3 billion). Two of three industries within the subsector reported higher sales—led by the lumber, millwork, hardware and other building supplies industry (+9.6 percent)—which posted its fourth increase in five months.

Sales in the food, beverage and tobacco subsector rose 2.4 percent to C$12.2 billion (US$9.9 billion) in July, following a 1.2 percent decline in June. All three industries in the subsector increased, led by the food industry—up 1.3 percent to C$10.9 billion (US$8.8 billion)—mostly erasing the 1.4 percent decline in June.

Sales in the motor vehicle and parts subsector rose 1.4 percent to C$11.6 billion (US$9.4 billion) on stronger sales in the motor vehicle industry (+1.5 percent). Imports of passenger cars and light trucks increased in July.

Sales in the miscellaneous subsector decreased 1.3 percent to C$8 billion (US$6.5 billion). Sales were down in four of the five industries in the subsector, with the recyclable material and chemical (except agricultural) and allied product industry contributing the most to the drop.

The farm product subsector declined for a second consecutive month, down 0.3 percent in July.

Sales in Alberta rose for the 9th time in 10 months, up 4.3 percent to C$6.9 billion (US$5.6 billion) in July. Six of seven subsectors posted increases, led by the machinery, equipment and supplies (+7.3 percent) and the food, beverage and tobacco (+5.2 percent) subsectors. Sales in the machinery, equipment and supplies subsector in Alberta rose for the third time in four months, growing 11.5 percent over the period.

Wholesale sales in British Columbia rose for the third consecutive month, up 3.4 percent to C$6.6 billion (US$5.4 billion) in July on the strength of higher sales in the building material and supplies (+9.2 percent) and the food, beverage and tobacco (+5.1 percent) subsectors. The building material and supplies subsector reported a record high C$1.8 billion (US$1.5 billion) in sales in July.

Sales in Saskatchewan rose 9.9 percent to C$2.4 billion (US$2 billion) in July, with increases in six of the seven subsectors. The majority of the gain was driven by higher wholesale sales in the miscellaneous subsector (+16.8 percent), the largest subsector within the province.

In Quebec, sales increased 1.4 percent to C$11.1 billion (US$9 billion). The machinery, equipment and supplies (+4.8 percent) and personal and household goods (+5.1 percent) subsectors were the main contributors to the gain. The building materials and supplies subsector (+2.7 percent) also contributed to the rise, reaching its highest sales value on record.

Sales in Ontario rose for an eighth consecutive month, up 0.4 percent to C$31.8 billion (US$25.8 billion) in July. The increase was attributable to higher sales in the food, beverage and tobacco (+3.3 percent) and the motor vehicle and parts (+2 percent) subsectors. Wholesale sales in Ontario have grown by 8.2 percent over this eight month period,

In Manitoba, sales rose 0.4 percent to C$1.6 billion (US$1.3 billion) with sales up in five subsectors. The majority of the increase was attributable to gains in the building material and supplies subsector, up 6.8 percent to C$225 million (US$182.4 million) in July.

In Newfoundland and Labrador, sales rose 1.1 percent to C$443 million (US$359.1 million). Sales were up in five of the seven subsectors, with the food, beverage and tobacco subsector contributing the most in dollar terms, up 17 percent to C$162 million (US$131.3 million).

Sales in Nova Scotia (-3.4 percent) fell in five of the seven subsectors. The decline was mainly attributable to lower wholesale sales in the motor vehicles and parts (-9.9 percent) and food, beverage and tobacco (-8.5 percent) subsectors. The loss was partly offset by an increase in the building material and supplies subsector (+9.8 percent).

Sales in Prince Edward Island were down for a second consecutive month, declining 9.8 percent to C$79 million (US$64.1 million) in July.

In New Brunswick, sales declined 3.2 percent to C$579 million (US$469.4 million) following five consecutive increases. The decrease was led by the food, beverage and tobacco subsector (-12.8 percent). Wholesale sales were down in all three industries, with the food industry contributing the most to the decline.

Wholesale inventories increased for the fourth consecutive month, up 0.7 percent to a record C$80.8 billion (US$65.5 billion) in July. Inventories were up in five of seven subsectors, representing 83 percent of total wholesale inventories.

In dollar terms, the machinery, equipment and supplies subsector (+1.7 percent) recorded the largest gain, followed by the motor vehicle and parts subsector (+1.8 percent). This was the third increase in four months for both subsectors.

The food, beverage and tobacco subsector (+0.7 percent) posted its fifth increase of 2017.

In the miscellaneous subsector (+0.3 percent), inventories rose for the 10th consecutive month.

Inventories in the personal and household goods subsector edged up 0.2 percent in July following a 5.5 percent gain in June.

The building material and supplies subsector (-0.9 percent) declined for the first time in three months.

The inventory-to-sales ratio declined from 1.31 in June to 1.30 in July. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

British Columbia had sales of C$69.7 billion (US$56.5 billion) in 2016—the fourth largest province in terms of its contribution to total wholesale sales. British Columbia accounted for 10 percent of wholesale sales in Canada in 2016, preceded by Ontario (51 percent), Quebec (18 percent) and Alberta (11 percent).

British Columbia is an important port of entry, especially with Asia, and wholesalers are significantly involved in imports and exports. British Columbia is the third largest province of entry for imports and the fourth largest province of domestic exports. In terms of exports by wholesalers, British Columbia is the third largest among the provinces. British Columbia led growth in gross domestic product for a second consecutive year in 2016.

The building material and supplies; food, beverage and tobacco; and machinery, equipment and supplies were the top three wholesale subsectors in British Columbia in 2016.

With the exception of 2008 and 2009, the building material and supplies subsector has been the largest subsector in British Columbia since 2004, followed by the food, beverage and tobacco and the machinery, equipment and supplies subsectors. In 2008 and 2009, the food, beverage and tobacco subsector was the top subsector, largely because sales in the building material and supplies subsector and in the machinery, equipment and supplies subsector declined significantly over this period, while the food, beverage and tobacco subsector was less affected by the recession.

The building material and supplies subsector was responsible one-quarter of total wholesale sales in British Columbia in 2016. Among the component industries within this subsector, the lumber, millwork, hardware and other building supplies industry was the largest, accounting for 71 percent the subsector.

British Columbia accounted for 47 percent of total Canadian shipments of lumber (softwood and hardwood combined) in 2016 and held 39 percent of total lumber stocks in Canada.

Similar to sales in other provinces, wholesale sales in British Columbia were affected by the economic recession of 2008-2009. Sales declined for seven straight months from September 2008 to March 2009, started recovering since then, exceeded its prerecession high by May 2012, and continued to climb. Sales in the building material and supplies subsector followed a similar pattern. The machinery, equipment and supplies subsector reached its prerecession high in the third quarter of 2014. Conversely, the food, beverage and tobacco subsector contracted less and reached its prerecession level by the fourth quarter of 2011.

Total wholesale sales in British Columbia have been on an upward trend since late 2009, with sales increasing for seven consecutive years from 2010 to 2016. On average, sales grew 6 percent annually from 2010 to 2016, while overall total wholesale sales in Canada grew 4.6 percent over the same period. Among the top three subsectors in British Columbia, both the building material and supplies and the machinery, equipment and supplies subsectors rose for seven consecutive years from 2010 to 2016, while, the food, beverage and tobacco subsector increased for six consecutive years.

In 2016, only Prince Edward Island (+9.9 percent), Saskatchewan (+7 percent) and Newfoundland and Labrador (+6.4 percent) reported average yearly growth rates above British Columbia.

 

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