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Analysis — November 2010

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Wholesale sales increased for the fourth consecutive month in November, rising by 1.2% to $45.7 billion.

Chart 1

This increase in sales is explained in large part by higher sales in the machinery, equipment and supplies subsector, the miscellaneous subsector, and the food, beverage and tobacco subsector.

In volume terms, wholesale sales were up 1.3% in November.

Widespread gains in wholesale sales

In November, there were gains in all subsectors, with the exception of motor vehicle and parts. Excluding sales for that subsector, which represents 16% of total wholesale trade, wholesale sales grew by 2.4%.

The largest increase came in the machinery, equipment and supplies subsector (+4.5%). Sales in this subsector reached $9.7 billion in November, their highest level since November 2008. All four component industries in this subsector posted growth in sales.

Sales in the miscellaneous subsector rose by 2.9%, mainly owing to higher sales of agricultural supplies. This is the fifth monthly sales increase in six months in this subsector.

The food, beverage and tobacco subsector saw a 1.8% gain in November, after increasing 0.7% in October.

The only decline in sales in November was observed in the motor vehicle and parts subsector (-4.2%), in large part due to a significant decrease in sales in the motor vehicle industry (-6.8%).

Sales up in most provinces

Wholesalers in eight provinces reported higher sales in November. Only wholesalers in Ontario and Nova Scotia experienced a decrease in sales from October to November.

In Quebec, wholesale sales rose by 3.9% in November following five consecutive monthly decreases. Sales reached $8.7 billion, their highest level since September 2008.

In Western Canada, sales grew in all provinces in November.

Note to readers

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

Wholesale 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 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.

Saskatchewan posted the highest rate of growth among the western provinces. Sales increased by 9.6% in November, the fourth gain in five months. Higher sales in the agricultural supplies industry were responsible for most of this growth.

Ontario, which accounts for more than 50% of all wholesale sales, registered a slight decrease in November. Sales fell by 0.2% due to the weakness in the motor vehicle and parts subsector.

Slight increase in wholesale inventories

Inventories grew 0.4% in November to $52.8 billion. Wholesale inventories have remained relatively unchanged since the summer of 2010.

In November, 16 of the 25 industries registered increases in inventories. Wholesalers in the other machinery, equipment and supplies industry, as well as the lumber, millwork, hardware and other building supplies industry registered the largest inventory gains.

These increases were partially offset by a decrease in the inventories of motor vehicle wholesalers.

The slight increase in inventories compared with that of sales led to a reduction in the inventory-to-sales ratio, which declined from 1.17 in October to 1.16 in November.

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