The 2020 Mid-Year Economic Update_long

Canada Wholesale Revenues Stay Steady in April

of decline that began in December 2004. The slump in steel prices in 2005 (Chinese steel production surged, causing prices to fall) was offset in part by strong demand resulting from major investment in non-residential construction in Western Canada. Together, Alberta and British Columbia accounted for more than three-fourths of the total increase in national construction investment in the non-residential sector from 2004 to 2005.


Declines Concentrated in Western Canada
The three westernmost provinces also posted sales declines in April. The steepest decrease was registered in British Columbia (-2.2%) and was mainly attributable to the office machinery, lumber and motor vehicle groups. Together, these three groups account for approximately 23% of British Columbia’s sales. Wholesale sales have generally been rising in British Columbia since September 2003.


Alberta wholesalers recorded their first sales decline in nine months (-0.5%), attributable to the “other products” category and the computer and electronic equipment group. In Saskatchewan, wholesale sales fell 1.1%.


Wholesalers Build Up Inventories
In contrast to the previous month, inventories rose 1.9% in April, their strongest increase since April 2001. Inventories of machinery and equipment, motor vehicles, and computers and electronic products registered the largest increases in value. In value terms, the inventories of these sectors account for approximately 33% of total wholesale inventories. The trend in total inventories has been generally upward since November 2003.


Because of the increase in inventories, combined with stable sales, the inventory-to-sales ratio rose to 1.22, up from 1.20 in March.


For details by sector, click here.
For more economic indicators, updated monthly by MDM, click
here.


Related Stories:
Economic Activity Picks Up in Canada in 1Q


Release taken from Statistics Canada


Wholesale sales remained essentially unchanged in April (+0.1%) after posting strong growth in March (+1.2%). Wholesalers sold $41.6 billion worth of goods and services in April. Increased sales of consumer goods were offset by decreased capital spending. Total wholesale sales have generally been rising since April 2003.


In April, sales rose in three of the seven wholesale sectors: food, beverages and tobacco products (+1.8%), personal and household goods (+1.3%) and “other products” (+1.2%). The steepest decline was registered by wholesalers of building materials (-1.8%).


In constant dollars, wholesale sales grew 1.0% in April. There was a fairly broad-based decline in prices, with 13 of the 15 trade groups registering price decreases during the month, primarily because of the strengthening of the Canadian dollar.


Food, Beverage and Tobacco Products
The food, beverage and tobacco products sector saw its sales grow by 1.8% in April.


Wholesale sales of food products grew by 2.4% in April, more than offsetting the 0.4% decrease in March. After posting generally rising sales until March 2003, this trade group has since seen its sales level off. Lower import prices of some products since 2003, along with stronger competition, may have contributed to lower growth for this group.


Wholesale sales of alcohol and tobacco products declined 3.5% in April.


Second Consecutive Rise for the “Other Products” Sector
After increasing by 2.9% in March, sales of “other products” went up an additional 1.2% in April. The latter increase is attributable to the strong growth of products relating to the agricultural industry, such as seed and fertilizer, as well as chemicals and other agricultural supplies. These sales, which account for roughly one-quarter of the sales of this sector, were responsible for the advance.


Average monthly growth, which was very strong until May 2005, subsequently began to slacken, partly owing to a steep decline in exports of some components such as fertilizers and fertilizer materials.


Building Materials Sector Declines
After the 0.9% advance in March, wholesalers in the building materials sector saw sales fall 1.8% in April. Canada’s mild winter in 2006 contributed substantially to the strong sales in previous months. April’s decrease was attributable to two groups in this sector.


Lumber and millwork (-5.5%) sales fell for the second time in three months, partly due to lower export prices as well as to a drop in residential construction in Canada. According to the Canada Mortgage and Housing Corporation, the annualized and seasonally adjusted number of housing starts in Canada fell 13.4% in April after rising 4.1% in March. Meanwhile, lumber exports declined 2.4% in April. Wholesalers are responsible for nearly 30% of exports of this type of goods.


Wholesale sales in the building materials group fell by 1.4% in April. However, April’s decline masks a solid performance, since this group has gone through a period of almost uninterrupted growth since the fall of 2003. Since the start of the year, the sales of this group have been 12.0% higher than in the same period of 2005, partly as a result of the renovation market. According to the Survey of Investment in Residential Construction, more than $6.7 billion was spent on renovations in the first quarter of 2006, up 9.1% compared to the first quarter of 2005.


Metal products wholesalers (+0.8%) posted a second consecutive increase in April. Since September 2005, this group has followed an upward trend following a period

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

0

articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.