The Canadian wholesale services price index (WSPI) rose 0.7 percent in the first quarter. Among the eight major wholesale sectors, margins were up in five and down in three.
The largest increase was posted by wholesalers of farm products (+8.8 percent). The increase in the farm product sector was largely attributable to margin gains by wholesalers of oilseed and grain products (+10.5 percent). Margins for canola and wheat recorded large increases during all three months of the first quarter.
To a lesser extent, margin increases by wholesalers of petroleum products (+1.6 percent), machinery, equipment and supplies (+1.3 percent) and food, beverage and tobacco products (+1.2 percent) also contributed to the first quarter advance of the WSPI. Gains registered by the petroleum product sector were mainly attributable to higher margins for natural gas products.
Margins for wholesalers of miscellaneous products were up 0.8 percent.
Conversely, increases in the WSPI were moderated by declines in the margins for wholesalers of personal and household goods (-1 percent), building material and supplies (-0.3 percent) and motor vehicle parts (-0.1 percent).
The WSPI was up 2.7 percent in the first quarter compared with the first quarter of 2013, posting its largest year-over-year increase since the first quarter of 2009.
The year-over-year gain in the WSPI was mainly attributable to margin increases in the farm product sector (+52 percent), specifically wholesalers of oilseed and grain products. Increased worldwide production of oilseed and grain products resulted in lower purchase prices; however, the declines in the selling prices were not as steep.
Margin gains by wholesalers of petroleum products (+9 percent), food, beverage and tobacco (+4 percent), the miscellaneous (+3 percent) and motor vehicles and parts (+2.1 percent) sectors also contributed to the year-over-year advance.
Year over year, the margin for machinery, equipment and supplies declined 0.5 percent. The Canadian dollar depreciated 8.6 percent against the US dollar year over year. Variations in exchange rates can have a strong influence on the WSPI given the high composition of imported machinery and equipment in the index.
Margins for wholesalers of building material and supplies were unchanged year over year.