Canada: Wholesale trade, March 2017

Wholesale sales rose 0.9% in March and surpassed the $60 billion mark for the first time. Gains were recorded in four of seven subsectors, accounting for 60% of total wholesale sales, and were led by the building material and supplies subsector.

In the first quarter of 2017, wholesale sales were up 3.6% from the fourth quarter of 2016. This was the highest quarterly change since the second quarter of 2008.

In volume terms, wholesale sales increased 0.6% from February to March.

Higher sales in four subsectors

The building material and supplies subsector recorded the largest increase in dollar terms, as sales rose 3.9% to a record high $8.4 billion on the strength of higher sales in the lumber, millwork, hardware and other building supplies industry (+5.7%) and the metal service centres industry (+8.2%). Exports of lumber and other sawmill and millwork products rose 6.0% in March.

Sales in the miscellaneous subsector rose 2.2% to $7.9 billion, following a 0.2% decline in February. Four of five industries contributed to the gain in March, with the chemical (except agricultural) and allied product industry contributing the most.

The food, beverage and tobacco subsector posted a second consecutive increase with sales growing 1.1% to $11.6 billion. Gains in the food industry (+1.1%) led the increase.

Sales were up 0.5% in the personal and household goods subsector, to $8.3 billion. While gains were widespread across the industries within the subsector, the personal goods industry (+5.0%) contributed the most.

The machinery, equipment and supplies subsector decreased 0.5% to $11.6 billion, following five months of increases. The construction, forestry, mining, and industrial machinery, equipment and supplies industry (-3.6%) contributed the most to the decline.

Sales in the motor vehicle and parts subsector edged down 0.2% to $11.6 billion as sales in the motor vehicle industry declined 0.5%. This was a second consecutive decline for both the subsector and the industry.

The farm product subsector (-1.6%) also declined in March.

Sales up in nine provinces

Wholesale sales were up in nine provinces in March, representing 97% of total wholesale sales. In dollar terms, British Columbia, Quebec, and Newfoundland and Labrador led the gain.

Following two consecutive declines, sales in British Columbia rose 1.9% to $6.3 billion, the second-highest sales level on record, primarily on higher sales in the building material and supplies subsector.

In Quebec, sales increased 1.1% to a record high $10.8 billion, led by the food, beverage and tobacco subsector. This was Quebec’s third monthly increase in the past four months.

Newfoundland and Labrador recorded its first gain in four months, with sales jumping 29.3% to $489 million, the highest since November 2016. The miscellaneous subsector was the largest contributor to the increase.

Sales in Alberta rose 1.5% to $6.4 billion, a sixth consecutive increase. Gains were recorded in four subsectors, led by the motor vehicle and parts subsector and the building material and supplies subsector.

Ontario posted a fourth consecutive increase, with sales up 0.3% to a record high $31.0 billion. Gains in three subsectors, led by the building material and supplies subsector, offset declines in the other subsectors.

In Saskatchewan, sales were up 1.4% to $2.2 billion, with only the miscellaneous subsector posting a gain while other subsectors declined.

Sales in Nova Scotia increased 1.8% to $808 million, led by gains in the motor vehicle and parts subsector.

In Prince Edward Island, sales rose 6.1% to $74 million on the strength of gains in five subsectors, mostly offsetting a 6.0% decline in February.

Sales in New Brunswick edged up 0.1% to $508 million, led by higher sales in the building material and supplies subsector.

Manitoba recorded the lone decrease in March, with sales edging down 0.1% to $1.6 billion. Declines were recorded in five subsectors.

Inventories edge down in March

Wholesale inventories edged down 0.3% to $77.8 billion in March. Lower inventories in two subsectors, representing 45% of wholesale inventories, more than offset higher inventories in others.

The machinery, equipment and supplies subsector (-3.7%) posted the largest decrease in dollar terms in March, the first decline in eight months.

Inventories in the personal and household goods subsector were down 2.4%, the first decline in four months.

Inventories in the miscellaneous subsector rose 5.7%, reaching their highest level on record in March.

In the building material and supplies subsector (+2.0%), inventories increased for the fourth consecutive month.

The motor vehicle and parts subsector posted its second consecutive increase, with inventories up 0.8% to their highest level on record.

Higher inventories were also reported by the food, beverage and tobacco subsector (+0.9%).

The inventory-to-sales ratio declined from 1.31 in February to 1.29 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.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell