Wholesale Services Price Index, third quarter 2016
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The Wholesale Services Price Index (WSPI) rose 0.2% in the third quarter, matching the increase in the second quarter of 2016. Of the eight subsectors, four were up and four were down. This was the fourth consecutive quarterly gain.
Higher margins for machinery, equipment and supplies merchant wholesalers (+2.7%) contributed the most to the increase in the WSPI in the third quarter. The gain in this subsector was mainly attributable to higher margins for computer and communications equipment and supplies merchant wholesalers (+12.7%), with the largest advance registered by computer, computer peripheral and pre-packaged software merchant wholesalers (+20.8%).
Also contributing to the increase of the WSPI in the third quarter were food, beverage and tobacco merchant wholesalers (+3.5%). Higher margins were recorded by food merchant wholesalers (+3.7%), led by dairy and milk products (+10.9%) and general-line food (+5.1%) merchant wholesalers.
To a lesser extent, miscellaneous (+2.4%) and farm product (+14.6%) merchant wholesalers also contributed to the gain.
Moderating the increase in the WSPI in the third quarter were lower margins for petroleum and petroleum products merchant wholesalers (-20.2%). This was the third consecutive quarterly decrease, and the second largest quarterly margin decline since 2008.
Margins for building material and supplies merchant (-1.4%), personal and household goods (-0.5%) and motor vehicle and motor vehicle parts and accessories (-0.4%) wholesalers also declined.
The WSPI advanced 3.6% in the third quarter compared with the same quarter in 2015. This was the 12th consecutive year-over-year increase.
Miscellaneous merchant wholesalers (+8.8%) recorded the largest year-over-year margin gain, followed by food, beverage and tobacco (+8.1%) and motor vehicle and motor vehicle parts and accessories (+8.1%) merchant wholesalers. Farm products merchant wholesalers (+7.9%) posted their first year-over-year increase since the fourth quarter of 2014.
Margins were also up for machinery, equipment and supplies (+5.8%), the sixth consecutive year-over-year increase. Personal and household goods (+0.9%) and building materials and supplies (+0.8%) merchant wholesalers also posted gains.
Petroleum and petroleum products merchant wholesalers (-19.8%) recorded the lone year-over-year decrease. This was the largest margin decline since the fourth quarter of 2009, when the index was down 40.3%.
The evolution of the wholesale sector in Canada
As 2017 marks the 150th anniversary of Confederation, we take a look back at recent trends in the wholesale sector in Canada.
Since 2008, petroleum and petroleum products merchant wholesalers have consistently been the most volatile subsector compared with the other subsectors in the WSPI.
Petroleum and petroleum products merchant wholesalers posted the largest margin decline during the first quarter of 2009, right in the middle of the 2008/2009 recession when the index reached its lowest level (-33.4%). The largest quarterly margin gain (+39.9%) was registered in the third quarter of 2008, when oil prices reached their highest point before collapsing.
Note to readers
The Wholesale Services Price Index (WSPI) represents the change in the price of the wholesale service. The price of the wholesale service is defined as the margin price, which is the difference between the average purchase price and the average selling price of the wholesale product being priced. The WSPI is not a wholesale selling price index.
With each release, data for the previous quarter may have been revised. The series are also subject to an annual revision with the release of second quarter data of the following reference year. The indexes are not seasonally adjusted. Data are available at the Canada level only. Starting with the fourth quarter of 2014, the WSPI program changed its data collection mode from a paper questionnaire to an online electronic questionnaire.
Since the release of second quarter 2016 data, the WSPI was updated to increase its relevance. The WSPI update, which took effect in the first quarter of 2016, included the selection of a new sample for four of eight major wholesale subsectors, the adoption of the 2012 North American Industry Classification System (NAICS) and updates to WSPI basket weights for all wholesale subsectors.
The following wholesale subsectors were updated with new samples:
1. Petroleum and petroleum products merchant wholesalers (NAICS 412)
2. Food, beverage and tobacco merchant wholesalers (NAICS 413)
3. Personal and household goods merchant wholesalers (NAICS 414)
4. Miscellaneous merchant wholesalers (NAICS 418).
The WSPI series were also converted to 2013=100, with 2013 as the base year. The relative importance of the basket items was updated using the 2013 industry gross margins from Annual Wholesale Trade Survey (2445).
Two new CANSIM tables, 332-0029 (monthly) and 332-0030 (quarterly), based on 2013=100 and using new vectors, replaced CANSIM tables 332-0006 and 332-0008, which were archived since the release of second quarter 2016 data.
As a result of these updates, users should exercise caution when comparing index levels based on the new basket with index levels based on the old basket.
Infographic: Producer Price Indexes at a Glance
The infographic, "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (), demonstrates how producer price indexes for goods and services are calculated and why they are important for the Canadian economy. 11-627-M
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