Highlights

Wholesale sales were unchanged in September, despite advances in 7 of the 11 sectors. Wholesale sales remained at $35.2 billion. In constant dollars, wholesale sales fell 0.7% in September.

Advances in seven sectors were primarily offset by lower wholesale sales of industrial machinery and equipment (-1.6%) and automotive products (-1.3%). These two sectors represent approximately 33% of the total value of wholesale trade. Two other important sectors to wholesale trade also experienced lower sales: computer and other electronics (-2.4%) and beverage, drug and tobacco products (-0.6%).

Countering these declines were notable advances in apparel (+5.6%), as well as in metals and hardware (+1.3%), lumber and building materials (+1.0%), and household goods (+0.5%). Wholesalers in the three latter sectors continued to benefit from a healthy housing and construction sector and spinoff consumer spending.

In general, consumer spending has had a positive ripple effect throughout 2002 across many sectors of the economy, including wholesale trade. After having levelled-off in mid-2001, wholesale sales began to rise in November 2001. Since then, sales have climbed 7.6%. During the same period, the household goods (+21.3%), building materials (+17.1%) and automobiles (+15.4%), wholesale sectors, which have strong links to retail trade and consumer spending, rose strongly.

Wholesale sales have been growing for the past three quarters. However, the strength has diminished in each quarter of 2002, going from 2.9% in the first quarter, to 2.2% in the second and finally to 1.2% in the third.

Wholesale sales of household goods rise for a twelfth consecutive month

Wholesalers of household goods - electric and electronic appliances, furniture, floor coverings and draperies - rose 0.5% in September, their twelfth consecutive monthly rise. Before this string of increases, sales had been falling since the spring of 2001. Wholesalers in this sector have benefited from the burgeoning housing sector and consumers' desire to spend on their personal living space. Also, there have been reports that wholesalers have benefited from a consumer trend towards higher-end appliances and home furnishings.

Industrial machinery still weak

Wholesale sales of industrial machinery fell back 1.6% after a 2.2% rise in August. Since the beginning of 2001, sales had been trending down before levelling off somewhat in March 2002. The sector recorded its sixth consecutive quarterly decline (-0.8%) in the third quarter. There was, however, a bright spot in the sector in September, as many wholesalers of professional equipment supplying the medical community reported strong sales.

Provincial advances and declines equally split

Advances and declines were equally split among the provinces - five up and five down. Saskatchewan (+4.6%) and Manitoba (+4.0%) recorded notable increases, whereas Ontario fell 1.6%.

Wholesale sales in Ontario fell primarily as a result of lower sales of automotive products in September. The sector represents approximately 30% of wholesale trade activity in the province. However, there were also declines in most trade groups.

Areas that reported healthy sales were lumber and building materials, and household goods. Despite the overall drop this month in Ontario, wholesale sales have been on the rise since late 2001, spurred on by the strong consumer spending on automotive products and the strong housing sector. Before this, sales had been generally flat since the spring of 2000.

In contrast, the Prairies recorded strong wholesale sales in September. Manitoba's increases were broadly based among all sectors, but very strong wholesale sales were reported in the "other products" category. This category includes the wholesaling of livestock, as well as agricultural chemicals and other farm supplies.

Wholesalers in Saskatchewan also saw healthy sales in most trade groups. As a result, wholesalers in this province reported their second consecutive monthly increase - something that has not occurred since the end of 2001. Wholesale sales have been rising cautiously since the fall of 2001, after sliding during the summer of that same year.

Inventory-to-sales ratio remains stable

Despite the rise in inventory levels in 2002, the wholesale inventory-to-sales ratio seems to have stabilized between 1.26 and 1.27. The inventory-to-sales ratio remained at 1.26 from August to September.

Wholesale inventories rose 0.3% to $44.5 billion in September. This represented the eighth consecutive monthly increase. Inventory levels have been climbing since the start of the year after falling throughout 2001.