Wholesale trade, April 2020
As the effect of the COVID-19 pandemic continued to spread throughout the economy, wholesale sales plummeted an unprecedented 21.6% to $49.8 billion in April, the lowest level since July 2013. All seven subsectors recorded lower sales for the first time since November 2008. In dollar terms, the motor vehicle and motor vehicle parts and accessories subsector contributed the most to the decline. Excluding this subsector, wholesale sales were down 14.2%.
Wholesale sales volumes dropped 21.5%, a record monthly decline, to their lowest level since September 2009.
COVID-19 impact in April
Respondents reported that the COVID-19 pandemic pushed sales $16.9 billion (unadjusted) lower in April, with four-fifths (79.5%) of wholesalers reporting an impact to their business.
The motor vehicle and motor vehicle parts and accessories subsector recorded the largest dollar-value impact from the COVID-19 pandemic in April, down $5.4 billion (unadjusted). Many of these companies noted that COVID-19 caused manufacturing stoppages, dealership closures and disruptions in consumer demand.
Over nine-tenths (90.1%) of wholesalers in the personal and household goods subsector reported that their businesses were affected by COVID-19, the highest proportion among all subsectors for a second consecutive month. Respondents in the subsector reported that the COVID-19 pandemic resulted in $2.6 billion (unadjusted) of lost sales in April, led by the textile, clothing and footwear industry (-$943 million, unadjusted). Respondents in the industry indicated that the lower sales volumes were mainly attributable to retail closures.
Lower sales driven by motor vehicle industry
With the Canadian motor vehicle industry highly reliant on motor vehicle imports, the widespread shutdowns in motor vehicle manufacturing throughout the world and a reduced demand due to the pandemic, continued to impact wholesale sales in April. The motor vehicle and motor vehicle parts and accessories subsector fell for a second consecutive month, dropping 64.7% to $3.3 billion—eclipsing the previous month's record decline of 21.7%. While all three industries in the subsector recorded declines in April, the motor vehicle industry accounted for about 90% of the decrease; sales in the industry were down 74.8% to $1.8 billion, their lowest level since March 1993.
Sales in the personal and household goods subsector recorded a second decline in three months, dropping 21.5% to $7.7 billion in April. While all six industries posted lower sales, the largest drop came in the pharmaceuticals and pharmacy supplies industry (-22.9% to $4.5 billion). Widespread declines were also reported in the building material and supplies subsector, resulting in a record 22.2% decline in sales to the lowest level since June 2013.
While all seven subsectors recorded lower seasonally adjusted sales in April, there were some sub-industries where sales increased on an unadjusted basis in April, including nursery stock and plants, alcoholic beverages, cigarettes and tobacco, and a handful of agriculture-related sub-industries.
Ontario leads April declines
Nine provinces recorded lower sales in Canada, with Ontario posting the largest drop. Saskatchewan recorded the only provincial increase.
Sales in Ontario were down 30.2% to $23.0 billion in April, following a 4.2% decline in March. Every subsector in the province had lower sales, with the majority of the decline coming in the motor vehicle and motor vehicle parts and accessories subsector, falling 85.7% to $930 million. Excluding the motor vehicle and motor vehicle parts and accessories subsector, provincial sales declined 16.6% in April.
Sales in Saskatchewan rose 1.6% to $2.3 billion, following a 6.8% increase in March. Higher sales were recorded in four of seven subsectors, led by the machinery, equipment and supplies subsector, up 5.0% to $653 million. The sole increase in this subsector was observed in the farm, lawn and garden machinery, equipment and supplies industry.
Wholesale inventories rise
Wholesale inventories increased 1.2% in April to $93.0 billion. Five of seven subsectors recorded gains, accounting for more than half of total wholesale inventories.
The personal and household goods subsector led the gains in April, with inventories rising 6.9% to $17.0 billion. While three of the subsector's six industries recorded higher stock, the pharmaceutical and pharmacy supplies industry rose the most (+15.0% to $7.7 billion). With most retail stores closed as a result of the pandemic, wholesale companies in the textile, clothing and footwear industry saw their inventories rise as they were unable to move product.
Following an increase to 1.45 in March, the inventory-to-sales ratio jumped to 1.87 in April, the highest value on record, as all subsectors experienced gains. The motor vehicle and motor vehicle parts and accessories subsector contributed the most to the rise, as its inventory-to-sales ratio climbed from 1.38 in March to 3.83 in April.
Looking forward: Impacts of COVID-19 on wholesale trade in May 2020
Statistics Canada remains committed to providing an accurate picture of the social and economic impacts of COVID-19.
As the largest component of Canada's service sector, wholesale trade impacts the whole economy, while acting as the "invisible" intermediary.
May marks the second month of widespread lockdown and it is anticipated that reported impacts on businesses for the month will not be as severe as seen in April.
The motor vehicle industry faced another difficult month as the widespread global manufacturing shutdowns continued and production did not begin to resume until late May or early June. While Ontario dealerships were given the green light to reopen on May 4, by appointment only, market analysts anticipate another decline in May, but one that is far less pronounced than April's record-setting drop.
In addition, an increase in May employment for the wholesale and retail trade sector, as shown in the Labour Force Survey, and the appreciation of the Canadian dollar are providing some evidence that the Canadian economy may have started the slow road to recovery.
COVID-19 impact analysis and 2020 outlook: Wholesale Services Price Index
The COVID-19 pandemic has significantly impacted and continues to impact many Canadian industries. To provide data users with some insight regarding price movements in selected industries, Statistics Canada is conducting a series of COVID-19 impact analyses.
The first release in this new series is on the wholesale trade industry.
Each impact analysis focuses on the response of a specific industry during past economic recessions and provides the outlook of the price index trend for the year 2020. As part of the analysis, Statistics Canada is releasing projected estimates for a series of price indexes. These projected estimates will be revised when each price index is officially released in the future.
Next planned releases will cover the outlook of price trends in two transportation service industries: the for-hire trucking industry and the couriers and messengers industry.
On June 23, Statistics Canada will host a webinar on COVID-19's Impact on the Wholesale Industry: Sales and Prices.
This webinar will provide a comprehensive overview of the measure of the impact of COVID-19 on the activities of wholesalers in Canada. Background information to better understand the value of wholesale trade in Canada will precede this overview.
This webinar will also provide an overview of the price response of wholesalers during past economic recessions, as indicated by the Wholesale Services Price Index, and the current outlook for 2020, amid the COVID-19 pandemic.
Note to readers
All data in this release are seasonally adjusted and expressed in current dollars, unless otherwise noted.
Seasonally adjusted data are data that have been modified to eliminate the effect of seasonal and calendar influences to allow for more meaningful comparisons of economic conditions from period to period. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Trend-cycle estimates are included in selected charts as a complement to the seasonally adjusted series. These data represent a smoothed version of the seasonally adjusted time series and provide information on longer-term movements including changes in direction underlying the series. For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions.
Both seasonally adjusted data and trend-cycle estimates are subject to revision as additional observations become available. These revisions could be large and could even lead to a reversal of movement, especially for reference months near the end of the series or during periods of economic disruptions.
Total wholesale sales expressed in volume are calculated by deflating current dollar values using relevant price indexes. The wholesale sales series in chained (2012) dollars is a chained Fisher volume index, with 2012 as the reference year. For more information, see Sales in volume for Wholesale Trade.
The Monthly Wholesale Trade Survey covers all industries within the wholesale trade sector, as defined by the North American Industry Classification System (NAICS), with the exception of oilseed and grain merchant wholesalers (NAICS 41112), petroleum and petroleum products merchant wholesalers (NAICS 412) and business-to-business electronic markets, and agents and brokers (NAICS 419).
Real-time data tables
Real-time data tables 20-10-0019-01, 20-10-0020-01 and 20-10-0005-01 will be updated soon.
Wholesale trade data for May will be released on July 17.
The product Monthly Wholesale Trade Survey: Interactive Tool (71-607-X) is now available online. This product is based on the data published in the tables of the Monthly Wholesale Trade Survey: 20-10-0074-01, 20-10-0076-01 and 20-10-0003-01.
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca). For analytical information, or to enquire about the concepts, methods or data quality of this release, contact John Burton (613-862-4878; firstname.lastname@example.org), Mining, Manufacturing and Wholesale Trade Division.