MRO Magazine

Machinery and equipment wholesale sales declined 1.9% in November

Ottawa, ON -- According to Statistics Canada, wholesale sales in Canada fell 1.6% from October 2008 to $44.4 billio...


Industry

January 23, 2009
By MRO Magazine

Ottawa, ON — According to Statistics Canada, wholesale sales in Canada fell 1.6% from October 2008 to $44.4 billion in current dollars in November 2008, as decreases in four out of seven sectors contributed to the third decline in four months. In terms of the volume of sales, wholesale sales were down 3.0%.

 

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada.

 

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At current prices, the machinery and electronic equipment sector declined 1.6% in November, reflecting a 1.9% sales drop in the machinery and equipment trade group, which accounts for half the sector.

 

Sales in the automotive products sector declined 2.2% in November, its second consecutive monthly decrease. Sales of motor vehicles fell 2.3% from October to $5.1 billion, and have fallen by just over one billion dollars since July 2008. Motor vehicle sales in November were at their lowest level since August 2003.

 

The largest decline (-6.0%) came in the ‘other products’ sector, which fell to its lowest level since March 2008. A significant decrease in both agricultural chemical and other farm supplies, as well as lower demand and prices for recyclable metals, were the main contributors to the decline in this sector.

 

Sales in the building materials sector decreased 1.3%, as a result of declines in the metal products (-4.3%) and lumber and millwork (-3.5%) trade groups. This was the third time since January 2008 that this sector posted lower sales.

 

The farm products sector advanced 3.5% while sales rose 0.2% in both the food, beverages and tobacco sector, and the personal and household goods sector.

 

Sales down in nine provinces

 

Overall, sales were down in nine provinces in November.

 

Wholesalers reported lower sales in both Ontario (-1.2%) and Quebec (-2.3%) during the month. Lower sales in the “other products” and the automotive sectors were the major contributors to the decreases in Ontario in November. In Quebec, the decline reflected weakness in a number of sectors including the “other products” sector and the building materials sector.

 

All of the western provinces reported lower sales in November, ranging from a 1.3% decline in British Columbia to a 2.1% drop in Saskatchewan (the third consecutive monthly decrease in this province).

 

Among the Atlantic provinces, only Prince Edward Island (+5.1%) posted higher sales in November.

 

Inventories continue to climb

 

Wholesale inventories rose for a ninth consecutive month, increasing 1.0% in November.

 

Overall, 10 of the 15 wholesale trade groups reported higher inventory levels, including the pharmaceuticals (+4.2%), motor vehicle parts and accessories (+2.4%) and building supplies (+1.6%) trade groups.

 

The slowdown in sales and rise in inventories led to an increase
in the inventory-to-sales ratio from 1.28 in October to 1.32 in November. This was the highest level since February 2001. 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.

 

The farm products sector advanced 3.5% while sales rose 0.2% in both the food, beverages and tobacco sector and the personal and household goods sector.