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Analysis — July 2010

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Wholesale sales edged down 0.1% in July to $43.9 billion dollars, following 0.3% decline in June. Excluding the motor vehicle and parts subsector, wholesale sales rose 0.6%.

Chart 1

In volume terms, wholesale sales were down 0.3% in July.

The largest decrease in dollar terms came in the motor vehicle and parts subsector, which fell 3.2% in July. All three component industries that comprise this subsector posted declines. The motor vehicle industry, which accounts for close to 80% of the subsector, fell 3.8% for the month. This was the first drop in this industry since April 2010.

The largest sales increase was reported in the food, beverages and tobacco products subsector (+2.3%). This gain was based solely on the strength of the food product industry, which rose 2.7% in July after posting a loss of 1.6% the previous month. This was the industry's eighth sales increase in nine months.

Note to readers

All the data in this release are seasonally adjusted and in current dollars, unless otherwise noted.

Wholesale trade sales expressed in volume are calculated by deflating current dollar values using import and industry product price indexes. Since many of the goods sold by wholesalers are imported, fluctuations in the value of the Canadian dollar can have an important influence on the prices of the goods bought and sold by wholesalers.

The wholesale sales series in chained (2002) dollars is a chained Fisher volume index with 2002 as the reference year.

Starting with the April 21, 2010 release of February 2010 data, the presentation of results makes direct use of the North American Industry Classification System instead of its trade group variant (see concordance table).

Sales in the machinery, equipment and supplies subsector rose 1.0% to $9.1 billion in July, after declining 1.5% in June. Increases were observed in three of the four industries in this subsector, with the farm, lawn, and garden machinery and equipment supplies industry (+6.7%) reporting the largest rise.

Wholesale sales down in the two largest provinces

In July, Quebec (-0.9%) registered the largest sales decrease in dollar terms. With this second consecutive drop, sales in this province were 1.9% below their January 2010 level.

Wholesale sales in Ontario edged down 0.2% in July, with weakness in the motor vehicle and parts subsector contributing to the decline. Following a 2.2% decline in February 2010, sales in Ontario have been relatively flat.

The largest sales increase in percentage terms occurred in Saskatchewan (+4.2%). This was the province's first gain after three consecutive months of declines. Higher sales in the agricultural supplies industry and the machinery, equipment and supplies subsector contributed to this growth.

In Alberta, sales rose 1.1% following an advance of 0.5% in June. This was the province's eighth increase in nine months.

Inventories continue to grow

Wholesale trade inventories rose 0.5% to $53.1 billion in July, their fifth increase in six months.

Overall, 13 of the 25 wholesale trade industries reported higher inventory levels.

Wholesalers of construction, forestry, mining and industrial machinery, equipment and supplies, food products, as well as lumber, millwork, hardware and other building supplies reported the biggest inventory gains in dollar terms.

The largest inventory decreases in dollar terms came in the motor vehicle, and other miscellaneous industries.

The growth in inventories, combined with the slight decline in sales, translated into an increase in the inventory-to-sales ratio from 1.20 in June to 1.21 in July.

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 3