Canada: Wholesale trade, May 2017

Wholesale sales rose 0.9% to a record high $61.6 billion in May. Sales were up in six of the seven subsectors, representing 80% of total wholesale sales. The miscellaneous subsector and the motor vehicle and parts subsector contributed the most to the advance.

In volume terms, wholesale sales increased 0.8% from April to May.

Sales increase in six of seven subsectors

The miscellaneous subsector reported the largest gain in dollar terms, up 2.6% to $8.0 billion in May following a 2.2% decline in April. Sales were up in four of the five industries, led by the agricultural supplies industry (+7.5%) following a 1.2% decline in April. The chemical (except agricultural) and allied product industry increased for the sixth time in seven months, up 8.4% in May.

Sales in the motor vehicle and parts subsector rose 1.4% to $11.6 billion following three consecutive monthly declines. The motor vehicle industry posted the lone increase (+1.9%) among the three industries.

In the food, beverage and tobacco subsector, sales rose 1.0% in May and surpassed the $12 billion mark for the first time. Higher sales in the food industry (+1.3%) contributed the most to the gain.

The personal and household goods subsector increased 0.6% to $8.5 billion, a sixth consecutive monthly gain. While sales were down in four of the six industries, the pharmaceuticals and pharmacy supplies industry more than offset these declines, rising 1.8% to $4.3 billion.

The machinery, equipment and supplies posted the lone decline in May, edging down 0.3% to $12.2 billion. The farm, lawn and garden machinery and equipment industry reported the largest decline in dollar terms, down 4.3% following a 22.2% gain in April.

Sales up in eight provinces

Wholesale sales were up in eight provinces in May, accounting for 78% of total wholesale sales. In dollar terms, Alberta and Newfoundland and Labrador led the gain.

Alberta recorded its seventh increase in eight months, with sales rising 4.5% to $6.8 billion—the highest level since April 2015. This was the largest monthly dollar gain in Alberta since July 2013. Sales were up in five subsectors, led by the machinery, equipment and supplies subsector.

Sales in Newfoundland and Labrador rose for the third time in four months, up 35.5% to $422 million in May, partially offsetting the 36.1% decline in April. While gains were widespread across subsectors, the miscellaneous subsector and the food, beverage and tobacco subsector were the largest contributors to the increase.

In British Columbia, sales grew 1.1% to a record high $6.3 billion, primarily on higher sales in the motor vehicle and parts subsector and the miscellaneous subsector.

Nova Scotia posted a third consecutive increase, with sales up 6.7% to a record high $900 million. Gains were recorded in five subsectors, led by the food, beverage and tobacco subsector.

Sales in New Brunswick rose 6.2% to $565 million, led by higher sales in the personal and household goods subsector.

Ontario recorded a sixth consecutive increase, edging up 0.1% to $31.5 billion. Gains in four subsectors, led by the motor vehicle and parts subsector, offset declines in the other subsectors, led by the machinery, equipment and supplies subsector.

Sales in Manitoba increased 1.2% to a record high $1.7 billion, led by the miscellaneous subsector. Sales in Prince Edward Island rose 16.5% to a record high $91 million, primarily on higher sales in the food, beverage and tobacco subsector. This was the third consecutive increase for both provinces.

In Saskatchewan, sales decreased for the first time in three months, down 1.2% to $2.3 billion in May, led by the machinery, equipment and supplies subsector.

Sales in Quebec edged down 0.2% to $11.0 billion, with declines in four subsectors. This was Quebec’s first decrease in three months.

Inventories rise in May

Wholesale inventories increased 0.6% to $79.0 billion in May, the ninth increase in ten months. Inventories were up in six of the seven subsectors, representing 73% of total wholesale inventories.

The building material and supplies subsector (+3.3%) posted the largest month-over-month increase in May. This subsector has also reported the largest year-to-date increase of all subsectors.

Inventories in the motor vehicle and parts subsector (+1.9%) increased for the fourth consecutive month, reaching its highest value on record.

The miscellaneous subsector (+1.5%) recorded its eighth consecutive increase. This subsector posted declines in ten consecutive months prior to the current upswing.

Inventories in the personal and household goods subsector (+0.3%) rose for the fifth time in six months.

The food, beverage and tobacco subsector (+0.3%) posted an increase for the third consecutive month.

Inventories in the machinery, equipment and supplies subsector (-1.7%) had the lone decrease in May.

The inventory-to-sales ratio declined from 1.29 in April to 1.28 in May. 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