DAILY NEWS Jul 22, 2014 11:17 AM - 0 comments

Wholesale sales rose over 2% in May, with Ontario seeing the biggest gain

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Ottawa - Wholesale sales rose 2.2% to $52.6 billion in May 2014, a second consecutive increase, Statistics Canada reports. While higher sales were recorded in four subsectors, which together represent 72% of wholesale sales, the motor vehicle and parts subsector accounted for most of the gain. Excluding this subsector, wholesale sales rose 0.7%. In volume terms, wholesale sales were up 2.2%.

Higher sales in motor vehicles lead May gains

The motor vehicle and parts subsector, which rose 9.8% to $9.3 billion, accounted for most of the gain in wholesale sales in May. Although all of the subsector's industries recorded higher sales, the motor vehicle industry (+13.2%) drove the increase. This was the third gain in four months for the industry, and its largest monthly increase since November 2009. Motor vehicles also recorded strong growth in exports, imports and manufacturing sales in May.

For the eighth time in 12 months, sales increased in the food, beverage and tobacco subsector, rising 1.9% in May to $10.3 billion. The food industry (+2.0%) contributed the most to the gain, although sales were up in the subsector's other industries as well.

Machinery and equipment sector

The machinery, equipment and supplies subsector rose 1.2% to $11.0 billion in May, on the strength of higher sales in three of its four industries. This was the second highest level on record for the subsector, just below the peak of $11.1 billion in November 2013.

Sales in the personal and household goods subsector rose 1.0% to $7.4 billion in May. The home entertainment equipment and household appliance industry (+4.7%) led the gain, following two consecutive declines.

Following five monthly gains, sales in the miscellaneous subsector decreased 0.9% to $6.7 billion in May, despite a 12th consecutive increase for the recyclable material industry.

The farm product subsector declined following five consecutive monthly gains, down 5.0% to $0.7 billion.

Sales up in six provinces

Sales increased in six provinces in May, which together represented 83% of wholesale sales in Canada. Ontario accounted for most of the gain.

Sales in Ontario increased for a second consecutive month, rising 3.2% to $25.6 billion, the highest recorded level for the province. The motor vehicle and parts subsector accounted for most of the gain.

Quebec had the second largest increase in dollar terms, rising 1.5% to $9.5 billion, the province's fourth increase in five months. Higher sales were recorded in most subsectors.

Sales in British Columbia increased for a third consecutive month, rising 1.9% to $5.2 billion on the strength of higher sales in most subsectors.

In Saskatchewan, sales rose 4.3% to $2.1 billion in May, more than offsetting April's decline. The machinery, equipment and supplies subsector and the miscellaneous subsector contributed the most to the increase.

Stronger sales in the food, beverage and tobacco subsector contributed to higher sales in both New Brunswick (+8.0%) and Nova Scotia (+4.9%). Both provinces also had their highest levels on record, reaching $525 million and $749 million respectively.

Sales declined 11.5% to $372 million in Newfoundland and Labrador as a result of weaker sales in the miscellaneous subsector. This subsector was also a major factor in Manitoba's 0.7% decline to $1.4 billion.

Inventories edge up in May

Inventories edged up 0.2% to $65.2 billion in May. Gains were recorded in five of seven subsectors, which together represented 78% of wholesale inventories.

Inventories continued to build in several subsectors, marking the fifth gain in six months for the machinery, equipment and supplies subsector (+0.5%), the building material and supplies subsector (+0.6%), the miscellaneous subsector (+0.5%) and the personal and household goods subsector (+0.2%).

Following two consecutive monthly gains, inventories declined 1.2% in the food, beverage and tobacco subsector.

The inventory-to-sales ratio decreased from 1.27 in April to 1.24 in May. 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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