Canadian wholesale sales in current dollars rose 3% in January to $44.4 billion, the strongest increase in three years. Canadian wholesale sales have maintained an upward trend since mid-2009. In volume terms, wholesale sales grew by 2.9%.

We Deliver Distribution News to Your Inbox Sign up below to receive MDM Update, your free weekly distribution news update by email.

By Sector
The higher sales in January reflected increases in all sectors. In particular, four sectors accounted for 80% of the growth: automotive products; building materials; machinery and electronic equipment; and "other products."

Sales in the automotive products sector grew by 4.8% to $7.8 billion in January, a fourth consecutive increase. This advance was entirely attributable to the motor vehicles group (+6.1%), while sales of motor vehicle parts and accessories edged down 0.3%.

Wholesale sales of building materials reached $6.0 billion in January. The three trade groups that comprise this sector all increased. The largest gains were recorded in the metal products group and the building supplies group.

Higher sales in the building materials sector coincided with an increase in housing starts in Canada. According to the Canada Mortgage and Housing Corporation, housing starts in January were up 5.8% from December.

The machinery and electronic equipment sector posted a 2.6% increase, reflecting sharply higher sales in the machinery and equipment group.

Sales in the "other products" sector grew by 4.1%, largely due to a surge in sales of agricultural chemicals. These products account for approximately one-quarter of the sales of this sector, which also includes recycled materials, paper products and non-agricultural chemicals.

We Deliver Distribution News to Your Inbox Sign up below to receive MDM Update, your free weekly distribution news update by email.

By Province
Except for Nova Scotia, all provinces posted higher wholesale sales in January.

Saskatchewan (+18.4%) registered the largest provincial gain in percentage terms. This growth was attributable to rising sales in the "other products" sector. This was the strongest increase in wholesale sales in Saskatchewan since July 1993.

In British Columbia, wholesale sales rose 4% in January, largely due to the automotive products and machinery and electronic equipment sectors.

Wholesale sales increased by 2.4% in both Quebec and Ontario. The sales increase in Quebec was attributable to higher sales in the personal and household goods and building materials sectors. Ontario wholesalers greatly benefited from strong sales in the automotive products sector.

Inventory-to-Sales Ratio
Wholesale trade inventories declined 1.1% in January to $52.8 billion, their lowest level since December 2006. This was the 11th consecutive monthly decline.

Overall, 11 of the 15 wholesale trade groups reported reduced inventories in January. The trade groups whose inventories showed the largest declines in dollar terms were machinery and equipment (-2.0%) and "other products" (-3.2%).

Increased sales for wholesalers, combined with decreased inventories, led to a decline in the inventory-to-sales ratio, which fell from 1.24 in December to 1.19 in January. By way of comparison, the inventory-to-sales ratio reached a high of 1.44 in March 2009.

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.