Wholesale trade

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Wholesale sales declined 4.2% to $41.1 billion in current dollars in January. Lower activity in the automotive products sector was a major factor behind the decrease. Excluding the automotive products sector, wholesale sales fell 0.9%. In terms of the volume of sales, wholesale sales also fell 4.2%.

Chart 1

Canadian wholesalers sell to both 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 January, four out of seven sectors, which accounted for about two-thirds of total wholesale sales, posted declines.

The largest decrease came from the automotive products sector, which fell 22.9% to $5.0 billion in January and accounted for approximately 80% of the total decline.

Sales of motor vehicles fell 30.0% to $3.4 billion, its lowest level since August 1996. Weakness in consumer demand in both Canada and the United States were the main contributors to the decline.

Other sectors that declined included the building materials sector (-6.2%) and the machinery and electronic equipment sector (-2.8%).

The largest increase in January occurred in the "other products" sector, which includes a wide range of wholesaling activity ranging 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 supplies, chemical (except agricultural) and allied products, and all other wholesalers.

Sales in this sector increased 5.1% in January, following an 8.4% drop in December. The main contributors were increases by agricultural chemical and other farm supplies and seed wholesalers. This was the first increase in this sector since August 2008.

Automotive products sector down in Ontario

In Ontario, sales fell 9.7% in January, with more than half of the drop attributed to the decline in the automotive products sector. Weakness was also reported in the machinery and electronic equipment and building supplies sectors. Ontario wholesale sales, which account for around half of total wholesale sales, reached their lowest level since February 2004.

By contrast, increases occurred in Saskatchewan (+13.7%), where sales rose following losses the previous four months, and in Manitoba, which posted an increase of 5.6% in January. Higher sales in the "other products" sector were behind most of the increase in both provinces.

Inventories flat in January

Inventories were essentially unchanged in January, following 10 months of increases.

In all, 10 of the 15 wholesale trade groups reported higher inventory levels, including apparel (+3.2%), and office and professional equipment (+1.3%).

These increases were offset by declines in inventories of motor vehicles (-5.3%), computer and other electronic equipment (-1.5%) and farm products (-5.3%).

The slowdown in sales and essentially unchanged inventories led to an increase in the inventory-to-sales ratio from 1.36 in December to 1.42 in January. This was the highest level since January 1996. 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 January 2009 issue of Wholesale Trade (63-008-XWE, free) will soon be available.

Wholesale trade estimates for February will be released on April 21.

To obtain data, or for more 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.