Wholesale Sales Edge Up 1% in October

Jan 3, 2019

Wholesale sales rose 1.0% to $63.8 billion in October, more than offsetting the 0.7% decline in September. Sales were up in four of seven subsectors, representing about 68% of total wholesale sales.

The machinery, equipment and supplies, and the personal and household goods subsectors contributed the most to the gains in October, while the motor vehicle and parts subsector posted the largest decline.

In volume terms, wholesale sales increased 0.9%.

Increase attributable to higher sales in four of seven subsectors

The machinery, equipment and supplies subsector rose 2.8% to $13.4 billion in October, a third increase in four months. Sales were up in three of four industries, led by the farm, lawn and garden machinery and equipment industry (+9.4%), its first increase in four months. Imports of industrial machinery, equipment and parts (+1.5%) and manufactured machinery sales (+2.9%) also increased in October.

Sales in the personal and household goods subsector were up 3.1% to $9.3 billion on higher sales in the pharmaceuticals and pharmacy supplies industry (+5.2%).

Wholesale sales in the miscellaneous subsector increased 1.6% to $8.5 billion. Sales were up in three of five industries, led by the paper, paper product and disposable plastic product industry.

The motor vehicle and parts subsector declined 1.7% to $10.6 billion, falling to its lowest level since November 2016. Following a 0.2% increase in September, sales in the motor vehicle industry decreased 2.8% to $8.2 billion in October. Imports of passenger cars and light trucks declined 5.8%, a second consecutive drop.

Sales in the building material and supplies subsector decreased 1.2% to $9.3 billion, the second decline in three months. Two of three industries were down, led by the lumber, millwork, hardware and other building supplies industry (-3.5%).

Higher sales in four provinces

In October, sales increased in four provinces, which together represented about 71% of total wholesale sales, led by Ontario and Quebec.

Wholesale sales in Ontario rose 2.3% to $33.0 billion in October, their highest level on record following two consecutive monthly declines. Sales were up in four of seven subsectors, led by the machinery, equipment and supplies (+5.9%) and the personal and household goods (+7.6%) subsectors.

In Quebec, sales increased for the third time in four months, up 1.2% to $11.9 billion. Higher sales in the building material and supplies (+10.8%) and the motor vehicle and parts (+10.6%) subsectors contributed the most to the gain.

Lower sales were reported in all four western provinces, led by Alberta. Wholesale sales in Alberta declined for a third consecutive month, down 2.4% to $6.6 billion, their lowest level since December 2017. The machinery, equipment and supplies (-4.6%) and the building material and supplies (-6.6%) subsectors contributed the most to the decline in October.

Following three consecutive monthly gains, sales in Manitoba declined 2.8% to $1.6 billion, led by lower sales in the machinery, equipment and supplies subsector (-12.4%).

In British Columbia, sales declined 0.6% to $6.6 billion, led by the building material and supplies subsector. The miscellaneous subsector led the decline in Saskatchewan, where sales fell 1.4% to $2.2 billion. This was the second consecutive decrease for both provinces.

Inventories increase for the seventh time in eight months

Wholesale inventories increased 0.9% to $88.0 billion in October, the seventh gain in eight months. Increases were reported in six of seven subsectors, representing about 83% of total wholesale inventories.

In dollar terms, inventories in the food, beverage and tobacco subsector (+3.6%) posted the largest gain, following a 1.8% decline in September. All three industries rose, with the food industry contributing the most to the increase.

Inventories grew 1.4% in the building material and supplies subsector, the seventh gain in 2018. The majority of the rise was driven by the electrical, plumbing, heating and air-conditioning equipment and supplies industry.

Higher inventories in the machinery, equipment and supplies subsector (+0.8%) were led by the other machinery, equipment and supplies industry.
The inventory-to-sales ratio was unchanged at 1.38 in October. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/181220/dq181220a-eng.htm.