Summary:
- Canadian wholesale trade declined for the second straight month in October, with lower machinery and food sales leading the decrease.
- Wholesale sales fell 0.5% on a seasonally adjusted basis from the previous month to 81.71 billion Canadian dollars ($60.94 billion).
- In volume terms, wholesale sales also dropped 0.7% in October.
- Nominal wholesale sales were 2.1% lower on a one-year basis.
- Five out of seven wholesale sectors experienced lower sales in October.
- Wholesale inventories rebounded in October, reaching levels similar to the first half of the year.
- The value of inventories rose 1.1% to C$129.28 billion, the largest increase since February.
Details:
Canadian wholesale trade continued to weaken in October, as lower machinery and food sales contributed to a decline in overall sales. Statistics Canada reported that wholesale sales fell by 0.5% on a seasonally adjusted basis from the previous month, amounting to 81.71 billion Canadian dollars or $60.94 billion. This decline was less severe than the advance estimate of a 1.1% fall in sales, but it follows a 0.6% drop recorded in September. In terms of volume, or price-adjusted figures, wholesale sales experienced a second consecutive monthly decline, sliding down by 0.7% in October.
On a year-over-year basis, nominal wholesale sales were down by 2.1%, indicating a continued struggle for the sector. Wholesalers are a key component of Canada’s services industry, serving as intermediaries between farmers or manufacturers and businesses that consume their goods. They are also involved in importing and redistributing goods within the country.
The manufacturing sector also saw a decline in October, with sales dropping by 2.8% compared to the previous month. This decrease was driven by lower shipments of petroleum, machinery, and computer and electronic products. Retail sales data for October is expected to be released on Thursday.
Among the seven wholesale sectors monitored by Statistics Canada, five experienced lower sales in October. Sales of machinery, equipment, and supplies fell for the second consecutive month, declining by 1.6%. Meanwhile, the food, beverage, and tobacco sector saw a 1.1% drop in sales primarily due to the food industry. However, sales of building materials and supplies increased during the same period.
In terms of inventories, wholesale levels rebounded in October and reached levels comparable to those observed in the first half of the year. The value of inventories rose by 1.1% to C$129.28 billion, demonstrating the largest increase since February.
Taking into account sales by petroleum, oilseed, and grain merchants, wholesale sales for October were 0.8% higher than the previous month at C$130.31 billion. Inventories on the same basis increased by 0.3% to C$146.63 billion.
The decline in Canadian wholesale trade reflects ongoing challenges faced by the sector, particularly in machinery and food sales. However, the rebound in inventories suggests some stability and potential for improvement in the coming months.
