DAILY NEWS Jun 24, 2014 9:12 AM - 0 comments

Machinery and equipment sector sales rise 2.2% to $10.8 billion in April

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Ottawa - Wholesale sales rose 1.2% to $51.2 billion in April 2014, following a decline in March. Higher sales were recorded in all subsectors except for food, beverage and tobacco, according to Statistics Canada. The subsectors that rose in April accounted for 80% of wholesale sales.

In volume terms, wholesale sales were up 1.2%.

Higher sales in six subsectors

The largest gain in April was in the building material and supplies subsector (+3.6%), which rose for a fourth consecutive month to reach $7.4 billion. All of the subsector's industries recorded higher sales, with the lumber, millwork, hardware and other building supplies industry (+4.4%) contributing the most to the gain. This was the fifth consecutive increase for this industry. Exports of forestry products and building and packaging materials rose significantly in April.

The machinery, equipment and supplies subsector also recorded a large gain in April, rising 2.2% to $10.8 billion. The computer and communications equipment industry (+5.3%) reported a third increase in four months and the construction, forestry, mining and industrial machinery, equipment and supplies industry (+3.9%) rose for a fourth consecutive month. The gains in these two industries offset declines in the farm, lawn and garden machinery and equipment industry (-6.7%), which recorded its lowest level since June 2013.

The motor vehicle and parts subsector rose 1.1% to $8.3 billion, offsetting some of the decline recorded in March. Gains were recorded in all of the subsector's industries. Stronger exports, imports and manufacturing sales were also recorded for motor vehicles and parts in April.

Sales rose 0.5% to $6.6 billion in the miscellaneous subsector, a fifth consecutive increase. A fourth increase in five months for the agricultural supplies industry (+2.1%) and an 11th consecutive increase for the recyclable material industry (+5.0%) offset the decline in the paper, paper product and disposable plastic product industry (-3.3%).

The farm product subsector (+3.1%) recorded a fifth consecutive gain in April.

Sales decreased 0.9% to $10.1 billion in the food, beverage and tobacco subsector as a result of lower sales in all of its industries. This was the second decline in seven months for the subsector.

Sales up in six provinces

Sales increased in six provinces, which together represented 74% of wholesale sales in Canada. Ontario and British Columbia accounted for much of the gain.

Sales rose 2.3% to $24.6 billion in Ontario, more than offsetting the decline in March. The machinery, equipment and supplies subsector was the largest contributor to the increase, although gains were recorded in most subsectors.

British Columbia was the second largest contributor to the increase in April, rising 3.9% to $5.1 billion. Gains were recorded in most subsectors and led by the building material and supplies subsector. This increase partly reflected the resolution of a month-long strike at Port Metro Vancouver in March.

Sales in Alberta increased for a fourth consecutive month, rising 0.8% to $6.9 billion.

In Nova Scotia, sales rose 4.8% to $0.7 billion on the strength of gains in the machinery, equipment and supplies subsector. This was the highest level recorded for the province since October 2013.

Following three consecutive monthly gains, sales decreased 1.0% to $9.4 billion in Quebec. The food, beverage and tobacco subsector led the decline.

In Saskatchewan, sales fell 3.2% to $2.0 billion. Similarly, sales in Manitoba dropped 3.7% to $1.4 billion. In both provinces, the machinery, equipment and supplies subsector accounted for the decline.

Sales in New Brunswick decreased 2.8% to $0.5 billion, the third decline in four months. The food, beverage and tobacco subsector was the largest contributor to the decline.

Inventories rise in April

Inventories rose 0.7% to $64.7 billion in April. Gains were recorded in four of seven subsectors, representing 74% of wholesale inventories.

The largest gain in dollar terms was in the machinery, equipment and supplies subsector (+1.3%), a fourth consecutive monthly increase.

Inventories rose for the third time in four months in the food, beverage and tobacco subsector (+2.3%).

Gains were recorded for a second consecutive month in the building materials and supplies subsector (+0.8%) and the personal and household goods subsector (+0.5%).

Following three consecutive monthly gains, inventories declined 1.0% in the motor vehicle and parts subsector.

The inventory-to-sales ratio decreased from 1.27 in March to 1.26 in April. 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.

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