Wholesale trade

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Wholesale sales declined 3.4% to $42.8 billion in December, the largest month-over-month decrease since August 2003.

In terms of the volume of sales, wholesale sales fell 3.6%.

Chart 1

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada.

In December, five out of seven sectors, which account for about two-thirds of wholesale sales, reported declines.

The machinery and electronic equipment sector declined 4.5% in December.

The automotive products sector declined 3.4% to $6.5 billion. Sales of motor vehicles fell 5.0% to $4.8 billion, their lowest level since May 2001.

Wholesalers in the building materials sector reported a 4.8% decrease, reflecting declines in the three trade groups: building supplies (-5.1%), metal products (-2.1%) and lumber and millwork (-7.9%).

Only two sectors posted an increase in sales in December: the food, beverages and tobacco sector (+1.2%) and the personal and household goods sector (+0.4%).

The largest decline in December occurred in the "other products" sector, which ranges from recycled metal, recycled paper and paperboard, stationery and office supplies, and other paper and disposable plastic products wholesalers, to agricultural feed and seed wholesalers and agricultural chemical and other farm suppliers, chemical (except agricultural) and allied products, and all other wholesalers.

Sales in this broad sector, which accounted for almost 40% of the decline in total wholesale sales, fell 10.4%. The main contributors were declines in agricultural chemical and other farm supplies, non-agricultural chemicals, and recyclable metals. Since August 2008, when this sector reached a high of $6.7 billion, sales have fallen 23.1%.

Wholesale sales down in all provinces

Wholesale sales were down in all 10 provinces. In Ontario, they fell 1.3% and in Quebec, they dropped 3.6%.

In December, lower sales of motor vehicles and declines in the "other products" sector were the major contributors to the decreases in Ontario. In Quebec, the decline reflected weakness in a number of sectors led by "other products" and building materials.

In the West, the largest decline occurred in Saskatchewan (-14.9%), where sales have lost a quarter of their value since their August 2008 high.

In Alberta, sales fell 6.0%, while British Columbia posted a 6.1% decline. Sales in both provinces reflected weakness in the "other products," machinery and electronic equipment and building materials sectors.

Declines within the Atlantic provinces ranged from 2.1% in Nova Scotia to 6.4% in Prince Edward Island.

Slight increase in inventories

Inventories edged up 0.1% in December.

Of the 15 wholesale trade groups, 9 reported higher inventory levels, including apparel (+3.7%), pharmaceuticals (+1.6%), building supplies (+1.3%) and motor vehicle parts and accessories (+0.5%).

These increases were partially offset by declines in computer and other electronic equipment (-8.6%) and lumber and millwork (-4.4%) inventories.

The slowdown in sales and rise in inventories led to an increase in the inventory-to-sales ratio from 1.32 in November to 1.37 in December. The inventory-to-sales ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

Chart 2

Available on CANSIM: tables 081-0007 to 081-0010.

Definitions, data sources and methods: survey number 2401.

The December 2008 issue of Wholesale Trade (63-008-XWE, free) will soon be available.

Wholesale trade estimates for January will be released on March 18.

To obtain data or general information, contact Client Services (toll-free 1-877-421-3067; 613-951-3549; wholesaleinfo@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Steve Chadder (613-951-0303; steve.chadder@statcan.gc.ca), Distributive Trades Division.