Canadian wholesale sales in current dollars fell 0.6% to $40.3 billion in April. Lower sales in the building materials sector and the machinery and electronic equipment sector were the main factors contributing to the decrease, according to Statistics Canada. In terms of the volume of sales, wholesale sales were up 0.5%. This was the first increase since September 2008.
Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The increase in the volume of sales, compared with the decrease in current dollar sales in April, reflects lower prices paid by wholesalers for imported goods, and the effect of the appreciation of the Canadian dollar versus the US dollar during the month.
In April, four of the seven sectors, accounting for two-thirds of total wholesale sales, declined.
Sales in the building materials sector fell 2.9% in April, continuing the downward trend that began in the fall of 2008. Every trade group in the sector was down: metal products (-4.7%), lumber and millwork (-2.5%) and building supplies (-2.3%).
The decline in the building materials sector’s sales coincides with a slump in Canada’s construction industry. According to the Canada Mortgage and Housing Corporation, housing starts fell 20% in April compared with March, while international trade data show that Canadian lumber exports were down 10% in April.
Sales in the machinery and electronic equipment sector decreased 1.2%, reflecting a 4.0% drop in the computers and other electronic equipment trade group. The largest increase in sales came in the automotive products sector, which rose for a third consecutive month in April.
Sales of automotive wholesalers totalled $5.5 billion, up 1.4%. Sales of motor vehicles (+2.4%) led the upward movement in the automotive products sector, as sales of motor vehicle parts decreased 1.1% during the month.
Wholesale sales were down in eight provinces. Only Newfoundland and Labrador (+2.1%), British Columbia (+1.2%) and all of the territories saw increases in April.
Manitoba and Saskatchewan posted large declines in April, with sales down 6.0% and 3.2% respectively. The sales decrease in Saskatchewan was attributable primarily to weakness in the "other products" sector. This decline coincides with lower Canadian exports of fertilizers and fertilizer materials, which fell 36.5% in April compared with March.
Ontario and Quebec, which account for about70% of Canada’s total wholesale sales, saw declines of 0.3% and 0.4% respectively. Wholesalers in Ontario reported their first decrease in three months, mainly due to lower sales in the machinery and electronic equipment sector.
In British Columbia, sales rose (+1.2%) for the first time since August 2008 to more than $3.9 billion. The growth was mostly attributable to higher sales of motor vehicles.
Wholesale inventories fell for a second consecutive month (-1.3%) to$57.8billion in April. This was the largest decrease since October 2003.
Overall, 12 of the 15 wholesale trade groups reported lower inventory levels. The largest declines in dollar terms were in computers and other electronic equipment (-6.9%), motor vehicles (-4.0%) and building materials (-1.8%). These decreases were partly offset by higher inventories in office and professional equipment (+1.8%) and pharmaceuticals (+1.2%).
The sharper decline in inventories than in sales translated into a decrease in the inventory-to-sales ratio from 1.44 in March to 1.43 in April. It was the first decrease since July 2008. 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.