MRO Magazine

Study shows wholesalers a key link in the economy

Ottawa, ON -- Wholesale trade is one of the nation's most dynamic and forward-moving industries, according to a new...


Ottawa, ON — Wholesale trade is one of the nation’s most dynamic and forward-moving industries, according to a new Statistics Canada profile of the industry that examines its growth and economic performance during the past seven years, from 1997 to 2004.

Wholesaling is a multi-billion-dollar industry in Canada. In 2004, wholesalers did about $450 billion worth of business. Between 1997 and 2004, wholesale revenues rose by 42%.

During this period, output by wholesalers as measured by gross domestic product rose at an average of 7.1% a year, the third highest rate of growth among all major industrial sectors. This was well above the 4.2% increase for the economy as a whole.

In 2004, wholesale trade accounted for 6.3% of industrial output in Canada, up from 5.3% in 1997. As a result, it ranked as the third most important sector in the economy in 2004, up from fifth place seven years earlier.

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The industry was a beacon when it came to employment, with new jobs tending to be high paying and full time. During the seven-year period, employment in wholesale trade increased 28.2%, nearly double the rate of growth in both manufacturing and retail trade.

Wholesalers have been quick to adopt new information and communications technologies and have recorded above-average growth in capital investments. As a result, labour productivity in the industry is one of the highest in Canada.

Globalization, offshore outsourcing, and the arrival of American-style retailing, such as big box stores and club warehouses, have all helped propel wholesalers forward. This is especially true in terms of commodities with a predominantly retail base, such as motor vehicles, food, and home and personal products.

For example, wholesalers have played an important role in getting motor vehicles produced elsewhere in the world to Canadians. Overall, 6 out of every 10 cars in Canada are imported.

Likewise, fewer and fewer consumer-type products such as home furnishings, electronics and apparel are sourced from within Canada. As a result, wholesalers have been able to benefit by becoming a primary buyer and distributor of these products manufactured elsewhere in the world.