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Wholesale trade

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October 2008 (Previous release)

Wholesale sales fell 1.8% to $45.3 billion in current dollars in October, following a 1.1% increase in September. Declines in the recycled metals industry and the automotive sector were the main contributors.

Chart 1
Wholesale sales fall for second time in three months

In terms of the volume of sales, which take price fluctuations into account, wholesale sales were down 3.6%.

This was due in part to the impact of the depreciation of the Canadian dollar on import prices. In addition, export demand for Canadian goods, a significant part of which flows through wholesale markets, was down. Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters.

In October, four out of seven sectors reported lower sales. The largest decline (-8.0%) occurred in the "other products" sector, which registered its biggest monthly drop since March 2001. A significant fall in both demand and prices for recyclable metals was the main contributor to the decline in this sector.

After a partial recovery in September, sales of automotive products fell 5.4% in October to $6.9 billion. Almost all of the decrease was the result of a decline in the sales of motor vehicles, which fell 6.9%, erasing all of the gains made in September. Sales of motor vehicle parts and accessories were down 0.5%, after registering a large increase in September. The automotive sector continued to be the only sector with lower sales on a year-over-year basis.

Among all sectors, the food, beverages and tobacco sector showed the largest monthly increase, advancing 1.8%. Sales in the machinery and electronic equipment sector rose 0.4% in October, its eighth consecutive monthly increase.

Most provinces show a decline

Overall, seven provinces registered lower sales in October.


Note to readers

Wholesale sales in real terms are calculated by deflating current dollar values using import and industry product price indexes. As 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.

Definitions

The "other products" sector is comprised of recycled metal, recycled paper and paperboard, stationery and office supplies, other paper and disposable plastic products wholesalers, agricultural feed and seed wholesalers, agricultural chemical and other farm suppliers, chemical (except agricultural) and allied products, log and wood chip wholesalers, mineral, ore and precious metal wholesalers, second-hand goods wholesalers (except machinery and automotive), and all other wholesalers.


After posting increases in September, wholesalers in Ontario and Quebec reported lower sales in October. Sales were down 2.6% in Ontario and 1.7% in Quebec. Lower sales in the "other products" and automotive sectors were the major factors behind the decreases in both provinces in October.

Of the four western provinces, three reported lower sales in October. Manitoba recorded the biggest drop (-4.1%), its third decline in as many months, while sales in British Columbia were down 1.9%. Declines in both provinces were mainly due to the "other products" sector. The only increase occurred in Alberta, where sales rose 1.5% on the strength of the building materials and machinery and electronic equipment sectors.

Within the Atlantic provinces, New Brunswick posted its first decline (-4.5%) in October after six consecutive months of growth.

Inventories continue to climb

In October, wholesale inventories rose for an eighth consecutive month, up 0.8%.

Overall, 11 of the 15 wholesale trade groups reported higher inventory levels. Some of the more notable changes occurred in the household and personal products (+4.5%), computer and other electronic equipment (+2.8%) and metal products (+2.4%) trade groups.

The slowdown in sales led to an increase in the inventory-to-sales ratio from 1.24 in September to 1.28 in October. This was the highest level since December 2007. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Chart 2
Inventory-to-sales ratio up to highest level since December 2007

Available on CANSIM: tables 081-0007 to 081-0010.

Definitions, data sources and methods: survey number 2401.

The October 2008 issue of Wholesale Trade (63-008-XWE, free) will soon be available.

Wholesale trade estimates for November will be released on January 21, 2009.

To obtain data, or more information, contact Client Services (toll-free 1-877-421-3067; 613-951-3549; wholesaleinfo@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Steve Chadder (613-951-0303; steve.chadder@statcan.gc.ca), Distributive Trades Division.

Table 1
Wholesale merchants' inventories and inventory-to-sales ratio


Table 2
Wholesale merchants' sales