Canada: Wholesale trade, November 2017

Wholesale sales rose 0.7% to $63.6 billion in November, a second consecutive increase. Sales were up in six of seven subsectors, representing 99% of wholesale sales. The food, beverage and tobacco subsector and the motor vehicle and parts subsector led the gains.

In volume terms, wholesale sales increased 0.5%.

The food, beverage and tobacco subsector leads the gains

The food, beverage and tobacco subsector posted the largest increase in dollar terms in November, rising 1.9% to $12.2 billion. Higher sales in the food industry, up 2.2% to $11.1 billion, contributed the most to the gain. This was the highest level on record for both the subsector and the industry.

The motor vehicle and parts subsector rose 0.7% to $12.0 billion, its fourth increase in five months. The gain was attributable to higher sales in the new motor vehicle parts and accessories industry, up 2.4% to $2.3 billion. This was the highest level for this industry since September 2015. Manufacturing sales of motor vehicles, as well as imports and exports of motor vehicles and parts, also increased in November.

Sales in the building material and supplies subsector rose 0.6% to $9.0 billion, its third consecutive increase. Sales in the metal service centres industry rose 5.6% to $1.8 billion—its highest level since July 2008.

Ontario posts the largest increase

Sales in Ontario rose 1.7% to $32.9 billion in November. Sales were up in three of seven subsectors, led by the building material and supplies subsector (+8.0%). Sales in this subsector rose for the second time in three months, up 9.3% over the period. The second largest contributor was the food, beverage and tobacco subsector (+3.7%), its first increase in four months. The machinery, equipment and supplies subsector (+2.2%) rose for the third consecutive month.

Sales in Quebec and British Columbia were both down in November, primarily on lower sales in the building material and supplies subsector. Sales in Quebec decreased 0.5% to $11.5 billion, the second decrease in three months, but were up 12.6% year over year. Sales in British Columbia decreased 0.7% to $6.4 billion—the third decline in four months.

Saskatchewan (-1.6%) and Manitoba (-1.4%) also reported lower sales in November, with the miscellaneous subsector leading the decline. This was the third decline in four months for both provinces, with Saskatchewan down 2.9% and Manitoba up 1.3% over the four-month period.

Wholesale inventories decline for the first time in eight months

Wholesale inventories were down 1.2% to $81.1 billion in November, the first decline in eight months. Three of the seven subsectors were down, representing 60% of total wholesale inventories.

Inventories in the machinery, equipment and supplies subsector decreased 3.3% in November, accounting for the largest drop in dollar terms of all subsectors. The majority of the decline was driven by the other machinery (-9.3%) and the farm, lawn and garden (-6.4%) industries.

The motor vehicle and parts subsector (-4.0%) posted a second consecutive monthly decline. Lower inventory levels in the motor vehicle industry (-5.5%) contributed the most to the drop.

Inventories fell by 2.2% in the personal and household goods subsector, with declines in four of six industries.

The inventory-to-sales ratio decreased from 1.30 in October to 1.28 in November. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

StatsCanada

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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