Canadian Wholesale Sales Rise 0.8 percent in August

The miscellaneous subsector and machinery, equipment and supplies subsector contributed to the rise.

Wholesale sales in Canada increased for a fifth consecutive month in August, up 0.8 percent to C$56.8 billion (US$42.4 billion), according to Statistics Canada. Increases were recorded in five of seven subsectors, representing 80 percent of wholesale sales. The miscellaneous subsector and machinery, equipment and supplies subsector contributed the most to the rise.

In volume terms, wholesale sales were up 0.8 percent in August.

Although sales rose in five subsectors, gains were mainly concentrated in the miscellaneous subsector and the machinery, equipment and supplies subsector.

In dollar terms, the miscellaneous subsector recorded the largest increase, up 3.9 percent to C$7.2 billion (US$5.4 billion), mostly on the strength of higher sales in the agricultural supplies industry. Sales in this industry grew 11.8 percent to C$2.2 billion (US$1.6 billion) in August, the third increase in five months. The gain in August reflected higher exports of fertilizer, pesticide and other chemical products.

Wholesalers in the machinery, equipment and supplies subsector posted the second largest increase, with sales up 1.3 percent to C$11.4 billion (US$8.5 billion), the highest level since January 2016. This was the subsector's fourth consecutive monthly advance. The gain in August was largely attributable to the farm, lawn and garden machinery and equipment industry, where sales rose 15.2 percent to C$1.5 billion (US$1.1 billion), following an 8.3 percent decline in July. Canadian wholesalers in this industry import most of the machinery and equipment they sell. Imports of agricultural, lawn and garden machinery and equipment were also up in August.

After a decline in July, sales in the personal and household goods subsector (+0.3 percent) and building material and supplies subsector (+0.2 percent) edged up in August.

Sales also edged up in the motor vehicle and parts subsector (+0.1 percent), following a 1.7 percent increase in July. This was the fifth consecutive monthly gain for this subsector.

The food, beverage and tobacco subsector and farm product subsector recorded the only declines in August. Following increases in July, sales fell 0.2 percent to C$10.9 billion (US$8.1 billion) in the food, beverage and tobacco subsector, and decreased 2 percent to C$648 million (US$483.2 million) in the farm product subsector.

In August, sales increased in eight provinces, accounting for 81 percent of total wholesale sales. Ontario and Alberta contributed the most to the gain.

Sales in Ontario rose for the fourth consecutive month, up 0.4 percent to C$29.1 billion (US$21.7 billion) in August. Gains in four subsectors, led by the miscellaneous subsector and building material and supplies subsector, offset declines in the other subsectors.

Alberta recorded the second largest increase in dollar terms, with sales up 2.1 percent to C$6.2 billion (US$4.6 billion), partially offsetting the 2.8 percent decrease in July. The advance was led by higher sales in the machinery, equipment and supplies subsector.

In British Columbia, sales increased 1.7 percent to C$5.6 billion (US$4.2 billion), their highest level on record, primarily on higher sales in the motor vehicle and parts subsector and miscellaneous subsector. This was the province's fourth gain in five months.

Sales in Saskatchewan rose 4.4 percent to C$2.1 billion (US$1.6 billion) in August, mostly as a result of gains in the miscellaneous subsector and machinery, equipment and supplies subsector.

In Manitoba, sales increased 1.7 percent to C$1.4 billion (US$1 billion), on higher sales in the miscellaneous subsector. This was the province's first gain in three months.

In the Atlantic provinces, sales rose in Nova Scotia (+9.1 percent), Prince Edward Island (+7.7 percent) and New Brunswick (+1.8 percent), led by higher sales in the food, beverage and tobacco subsector.

Quebec was one of two provinces to record a decrease in August. Sales fell 1 percent to C$10.4 billion (US$7.8 billion), largely as a result of declines in the motor vehicle and parts subsector and building material and supplies subsector.

Sales in Newfoundland and Labrador fell 5.3 percent to C$392 million (US$292.3 million). While sales edged down in most subsectors, the miscellaneous subsector mainly contributed to the decrease.

Wholesale inventories rose 0.8 percent to C$72.1 billion (US$53.8 billion) in August, the first increase in 2016. Gains were recorded in all subsectors, except the farm product subsector.

Inventories in the machinery, equipment and supplies subsector (+1.1 percent) recorded the largest increase in dollar terms, followed by those in the motor vehicle and parts subsector (+1.2 percent). In the machinery, equipment and supplies subsector, this was the first gain in 10 months. In the motor vehicle and parts subsector, the rise in August was the third consecutive monthly advance, bringing inventories to their highest level on record.

Inventories also increased in the miscellaneous subsector (+0.8 percent), the building material and supplies subsector (+0.6 percent), the personal and household goods subsector (+0.1 percent) and the food, beverage and tobacco subsector (+0.6 percent).

The only subsector to record lower inventories was the farm product subsector (-4.8 percent).

The inventory-to-sales ratio was unchanged at 1.27 in August. This 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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