Highlights

Wholesale sales in November continued to rise for the sixth consecutive month. They edged up 0.3% in November to $35.9 billion in goods and services. Since November 2001, sales have grown by an average of 0.7% per month, after a lacklustre performance from the spring of 2000 to October 2001 (+0.1% on average).

Canadian wholesale sales from January to November experienced a year-to-date increase of 5.9 % compared with the same period of 2001. During this period, Canada has enjoyed a robust economy. This strong performance churned out 560,000 jobs in 2002, an annual growth rate of 3.7%, the highest since 1987. In addition, according to the Canada Mortgage and Housing Corporation (CMHC), 204,857 new homes were built in 2002, the largest increase since 1989.

In contrast, US wholesalers posted an increase of 1.1% in November. With this gain, year-to-date sales by American wholesalers saw only a 1.4% increase from same period of 2001.

In November, 8 of the 11 trade groups posted growth. Contributing the most to the increase in terms of value were the other products category (+2.1%), food products (+0.6%) and the automotive sector (+0.2%). The increased sales in these sectors were offset in part by sharp decreases in lumber and building materials (-2.7%) and industrial machinery (-0.8%).

In constant dollars, wholesale sales rose 0.2% in November.

Wholesale sales of non-durable goods on the rise

In contrast with October, sales of food product wholesalers rose 0.6% in November. With this increase, the industry was able to wipe out October's loss (-0.4%). Other non-durable goods industries, such as beverage, drug and tobacco products (+0.4%) and apparel and dry goods (+2.2%), also exceeded the national average.

Food products, as well as beverage, drug and tobacco products, were little affected by the drop in sales experienced by wholesalers during most of 2000 and the first three quarters of 2001. Notwithstanding a slight levelling-off in early 2002, wholesale sales of food products have been on the rise. Wholesale sales of beverage, drug and tobacco appear to have levelled off since July 2002.

Computer sales up for the second consecutive month

In November, wholesalers of computers, software and other electronic equipment posted a second consecutive increase in their sales (+1.1%). Despite volatile sales, the trend in sales has been generally stable since July. Even though sales in this sector rose from October 2001 to April 2002, the gains were insufficient to offset the decrease observed in the first nine months of 2001.

Sales of lumber and building materials down after five straight increases

Wholesalers of lumber and building materials saw their sales drop 2.7% in November. Even so, their sales were 12.1% higher than in November 2001. The drop was partly due to weaker building activity in November. According to the Labour Force Survey, the number of construction jobs fell by 16,000 in November. This was the first decline in seven months. CMHC reported a slight decrease in homebuilding activity in November.

In addition, lumber exports were down 0.9%. Wholesalers account for roughly 25% of exports of this type of merchandise. Nevertheless, this industry has generally posted robust growth since the last quarter of 2001, owing to the strong performance of the residential construction market.

Wholesale sales of household goods also declined in November (-0.4%). Despite the decrease, this trade group was up 17.4% from November 2001. Since October 2001, this industry has seen its sales grow robustly (+1.3% on average). This strong showing follows a period of declines extending from March to September 2001. Since October 2001, only the automobile sector has had a stronger performance, with a growth rate averaging 1.7%.

The strength of durable goods, such as household goods and automobiles, part and accessories, is largely due to the consumer market, which remained relatively robust throughout 2002. Conversely, industries that are heavily dependent on business investment, such as industrial machinery and computers, have experienced relatively lacklustre growth.

Wholesale sales up in six provinces

In November, six provinces contributed to the increase in wholesale sales. The largest gains were posted in British Columbia (+1.6%), New Brunswick (+1.4%) and Nova Scotia (+1.2%).

Strong sales of other products were behind much of the growth in British Columbia, and healthy wholesale sales of food products, computers, and other products accounted for much of the growth in Nova Scotia and New Brunswick. Unlike the general trend in total wholesale sales, wholesale sales in New Brunswick have been rising only since June. Prior to this, they exhibited a downward trend extending from the summer of 2001 to June 2002.

The steep drop experienced by Newfoundland and Labrador (-8.3%) was in part due to weaker sales in automotive products and electronics.

Inventory-to-sales ratio still at historic lows

The inventory-to-sales ratio declined in November to 1.24, compared with 1.25 in October. Since the start of 2002, this ratio has fluctuated between 1.24 and 1.27. It has remained well below the average level of 1.33 observed in 2001, despite successive increases in inventories throughout the year.

In November, inventories rose 0.1%, mainly as a result of increases in the automotive and household goods sectors.