MRO Magazine

Most trade wholesalers regained lost ground in September

Ottawa, ON -- In September 2003, wholesalers in Canada sold goods and services worth $36.6 billion, an increase of...


Industry

November 24, 2003
By MRO Magazine
MRO Magazine

Ottawa, ON — In September 2003, wholesalers in Canada sold goods and services worth $36.6 billion, an increase of 6.1% over the previous month, according to figures released Nov. 24, 2003, by Statistics Canada.

All trade groups posted an increase. However, only six of the nine trade groups that lost ground last month as a result of the blackout in Ontario bounced back.

Sales have been very volatile the past few months. Before this, sales had been generally trending downwards since the start of the year, after mainly rising from fall 2001 to January 2003.

In August, wholesalers saw their sales decline 4.1%. Ontario wholesalers bore the brunt of the decline, as a result of manufacturing production stoppages due to the blackout in Ontario and part of the United States.

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Ontario accounts for approximately half of Canadian wholesale sales. With their activities returning to normal in September, Ontario wholesalers posted an 8.7% increase in sales, which greatly contributed to the rise at the national level. Excluding Ontario, wholesale sales would have increased 3.6%.

The rise in wholesale sales was registered in all sectors. The most notable increase was in motor vehicles, parts and accessories (+22.3%).

Major increases were also experienced in other trade groups, such as metals and hardware (+6.1%) and lumber and building materials (+4.6%). The strong performance of the housing market — new home construction, home resale and renovation — continued to stimulate wholesale sales in these sectors.

In constant dollars, wholesale sales were up 6.0% in September.

Total wholesale sales decline for a second consecutive quarter

Despite September’s strong increase in total wholesale sales, third quarter sales saw a slight decline of 0.2%, following a 2.1% decrease in the second quarter. These two contractions were largely attributable to weak sales in the automotive sector.

However, quarterly sales in some sectors showed a solid performance. This was especially the case with lumber and building materials, which registered an increase of 8.0% in the third quarter. Higher prices for some materials and strong U.S. and Canadian demand in the construction industry had a major effect on sales in this sector.

Sales of beverage, drug and tobacco products rose 5.4%, the third consecutive quarter of expansion. The increase may in part be explained by a rise in the price of various drugs, as well as the increase in exports of drugs by some pharmacies selling via the Internet.

All provinces posted an increase in September

All provinces experienced an increase in sales in September 2003. The greatest advance was registered in Ontario (+8.7%), compared with the 7.5% drop in August. The strong presence of certain sectors in Ontario, such as the automotive sector, helped push up wholesale sales in that province. Similar to total wholesale sales, sales in Ontario have been volatile in recent months. Prior to this, sales had been generally falling since the start of the year.

Quebec (+4.8%) and Saskatchewan (+5.0%) also saw hefty increases in sales. Quebec showed strong sales of beverage, drug and tobacco products, as well as metals and hardware. For its part, Saskatchewan mainly benefited from increased sales in the “other products” category, which includes agricultural chemicals and other farm supplies.

Estimates for wholesale sales for October will be released by Statistics Canada on December 23.