Canada’s wholesale sales fall below expectations in June

Canada’s wholesale sales dropped in June after rising for eight consecutive months. Wholesale sales fell 0.5 percent to CAD 61.4 billion in the month. Declines were seen in five of seven subsectors. The drops were led by the food, beverage and tobacco subsector and the motor vehicle and parts subsector.

In terms of volume, whole sale sales dropped 0.7 percent on a sequential basis in June. For the second quarter as a whole, current dollar wholesale sales rose 2.5 percent while constant dollar sales rose 1.7 percent. For both current and constant dollars, the rise in sales in this quarter was the fifth straight quarterly rise, stated Statistics Canada.

In dollar terms, the food, beverage and tobacco subsector recorded the biggest decline in July, as sales dropped 1 percent to CAD 11.9 billion. This was mainly because of lower sales in the food industry, which dropped 1.1 percent and countered most of the 1.2 percent rise seen in May. For the subsector, June’s drop was the first in five months.

Sales in the motor vehicle and parts subsector fell 1 percent to CAD 11.4 billion due to subdued sales in the motor vehicle industry. The drop in July partially countered the gains in May for both the subsector and the industry. Manufacturing sales of motor vehicles and imports and exports of motor vehicles and parts also dropped in the month.

The wholesales in the machinery, equipment and supplies subsector recorded a 0.6 percent drop in June, with sales at CAD 12.2 billion. This was the second drop in nine months for the subsector.

Region wise, sales were down in six provinces, with Alberta contributing the most to the fall, followed by Quebec and Manitoba.

Wholesale inventories grew 0.6 percent to CAD 79.6 billion in June. This was the tenth rise in 11 months. Out of seven subsectors, four of them recorded rises, representing 68 percent of total wholesale inventories. Inventories in the personal and household goods subsector was up 3.2 percent to a record high CAD 14.2 billion, the largest month-on-month rise of all subsectors. This was the sixth rise in the last seven months.

Inventories in the machinery, equipment and supplies subsector saw the second largest monthly rise, increasing for a second time in three months. The miscellaneous subsector rose for the ninth straight month. The inventory to sales ratio rose to 1.30 in June. This ratio is a measure of the time in months required to exhaust inventories if sales were to stay at their current level.

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