Canadian Wholesale Trade Up In March, Marking 8th Quarterly Increase
Dean Popplewell | May 22, 2018 13:34
Canadian wholesale sales rose 1.1% to $62.8 billion in March, more than offsetting the decline in February. The motor vehicle and parts sub-sector contributed the most to the gain. Excluding this sub-sector, wholesale sales rose 0.2%.
Sales were up in four of seven sub-sectors in March. In volume terms, wholesale sales rose 0.8%.
In the first quarter of 2018, wholesale sales rose 0.5% in current dollars and 0.4% in constant dollars compared with the fourth quarter of 2017. For both current and constant dollars, this marked the eighth consecutive quarterly increase
Higher sales in four sub-sectors
The motor vehicle and parts sub-sector recorded the largest gain in dollar terms, with sales rising 5.0% to $11.8 billion, following three consecutive monthly declines. Lower sales in the other two industries within the sub-sector were outweighed by gains in the motor vehicle industry (+6.6%), where sales rose following five consecutive monthly declines. This was the highest sales level since the record high in September 2017 for both the sub-sector and the industry. Imports of passenger cars and light trucks were up in both February and March.
Sales in the building material and supplies sub-sector increased 3.4% to a record high $9.2 billion. Sales were up in every industry, led by the metal service centres industry (+9.4% to $1.9 billion). Related indicators including imports of metal and non-metallic mineral products and the Industrial Product Price Index for primary ferrous metal products and primary non-ferrous metal products also increased in March.
The personal and household goods sub-sector rose 0.6% to $8.8 billion. Gains in the pharmaceuticals and pharmacy supplies industry (+3.6%) offset declines in other industries.
Sales in the food, beverage and tobacco sub-sector declined for the second consecutive month, down 1.4% to $11.9 billion in March. The food products industry (-1.5%) accounted for most of the decline in the sub-sector.
Sales in the machinery, equipment and supplies sub-sector fell for the second time in three months, down 0.5% to $12.6 billion in March. The computer and communications equipment and supplies (-3.2%) and the construction, forestry, mining and industrial machinery, equipment and supplies (-2.5%) industries led the declines.
On a quarterly basis, the food, beverage and tobacco (+2.0%) and the machinery, equipment and supplies (+1.8%) sub-sectors led the gain in the first quarter of 2018, their second consecutive quarterly gain. The gains in these sub-sectors were attributable to record high sales in January (food) and February (machinery).
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Sales up in two provinces, led by Ontario
Sales were up in two provinces in March, which together accounted for 56% of wholesale sales in Canada. In dollar terms, Ontario contributed the most to the gains.
Sales in Ontario rose 2.5% to $32.8 billion in March, on the strength of higher sales in four of seven sub-sectors. This was the largest monthly increase for the province since January 2017. The motor vehicle and parts sub-sector (+7.7%) contributed the most to the gain, following five consecutive monthly declines. The building material and supplies sub-sector (+8.0%) also contributed to higher sales in Ontario with its second consecutive monthly gain.
In Saskatchewan, sales increased for the first time in five months, up 2.5% to $2.1 billion, on the strength of higher sales in three sub-sectors. The gain was led by higher sales in the miscellaneous sub-sector (+11.6%), following a 12.1% decline in February. The agricultural supplies industry contributed the most to the gains in the miscellaneous sub-sector.
Sales were down in Quebec for the fourth time in five months, declining 0.6% to $11.2 billion. Lower sales in the food, beverage and tobacco (-6.2%) and the building material and supplies (-2.5%) sub-sectors contributed the most to the decline. The food, beverage and tobacco sub-sector declined for the first time in 2018, while the building, material and supplies sub-sector decreased for the second time in three months. Despite the decline in March, sales in Quebec were up 0.1% in the first quarter of 2018, their eighth consecutive quarterly increase.
Following three consecutive gains, sales in Alberta declined 0.7% to $6.7 billion in March, led by the machinery, equipment and supplies sub-sector (-2.6%). This sub-sector has declined 4.5% in value over the past two months.
Inventories edge down in March
Wholesale inventories edged down 0.1% in March to $82.6 billion. Decreases in three sub-sectors, representing 32% of total wholesale inventories, were offset by gains in three other sub-sectors.
Inventories in the motor vehicle and parts subsector decreased 1.3% in March, accounting for the largest drop in dollar terms. The motor vehicle industry (-3.0%) was the sole contributor to the decline.
The personal and household goods sub-sector (-0.6%) decreased for the first time in 2018. Lower inventory levels in the personal goods industry (-6.1%) contributed the most to the drop.
Higher inventories in the building material and supplies subsector (+0.8%) were led by higher stock levels in the metal service centres industry (+4.6%).
Inventories in the miscellaneous sub-sector (+0.5%) rose for the fourth time in five months, led by the recyclable material (+16.0%) and agricultural supplies (+1.0%) industries.
The inventory-to-sales ratio decreased from 1.33 in February to 1.31 in March. 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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