MRO Magazine

Machinery helps gain in wholesale sales for October

Ottawa, ON -- Wholesale sales in current dollars edged up 0.3% to $41.1 billion in October 2009, the fourth in...


December 24, 2009
By MRO Magazine


Ottawa, ON — Wholesale sales in current dollars edged up 0.3% to $41.1 billion in October 2009, the fourth increase in five months, Statistics Canada reports. In terms of the volume of sales, wholesale sales were up 0.4%.


The slight increase (in current dollars) was mainly attributable to the automotive products and machinery and electronic equipment sectors, whose growth offset weak sales in the food, beverages and tobacco products sector.



After falling in August and September, automotive product sales climbed 1.5% to $6.6 billion in October. The upturn was due to higher sales in the motor vehicles trade group (+2.6%), fuelled by stronger demand for passenger cars in Canada and the United States in recent months.


According to the New Motor Vehicle Sales Survey, sales of passenger cars in Canada were up 5.3% in October compared with September. In addition, international merchandise trade data for October shows a 4.7% increase in Canadian exports of passenger cars.


The machinery and electronic equipment sector (+1.1%) also contributed to the October gain, largely as a result of higher sales for wholesalers of computers and other electronic equipment (+4.1%).


Overall, five of the seven wholesale trade sectors posted stronger sales. The only declines were in the food, beverage and tobacco products sector (-1.8%) and the “other products” sector (-0.2%). The latter consists primarily of wholesalers of agricultural fertilizers and supplies, chemicals, recycled materials and paper products.


Sales higher in six provinces


Ontario was the biggest contributor to October’s growth, posting its seventh increase in sales since the beginning of the year. Led by higher sales in the automotive products sector, sales in Ontario rose 0.9% to $20.8 billion in October.


In Quebec, sales rose for the first time in three months (+0.7%), largely as a result of stronger sales in the personal and household goods sector.


After shrinking for three consecutive months, sales in British Columbia increased 1.2% in October, in part because of higher sales in the building materials sector.


All of the Prairie provinces posted declines in October. In Saskatchewan, wholesale sales fell 6.3% as a result of weakness in the “other products” sector.


Eighth straight decline in inventories


In October, wholesale inventories were down for the eighth straight month (-1.5%), falling to $54.0 billion, their lowest level since September 2007.


Overall, 12 of the 15 wholesale trade groups reported lower inventory levels. The largest declines in dollar terms were in the inventories of the machinery and equipment group (-3.6%), the “other products” group (-1.6%) and the food products group (-1.9%). These decreases were slightly moderated by higher inventories in the computers and other electronic equipment group (+4.4%).


The large decline in inventories, combined with the increase in sales, translated into a significant drop in the inventory-to-sales ratio, from 1.34 in September to 1.31 in October.


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.


Wholesale trade estimates for November 2009 will be released on January 21, 2010.