MRO Magazine

Steady rise in wholesale sales of machinery and equipment trips in February

Ottawa, ON -- According to Statistics Canada, wholesale sales fell 1.2% in February 2010, following increases ...


Ottawa, ON — According to Statistics Canada, wholesale sales fell 1.2% in February 2010, following increases the previous three months. Lower sales in the motor vehicle and parts, and the machinery, equipment and supplies subsectors were major contributors to the decline.

In volume terms, wholesale sales were down 1.8% in February.

In February, four of the seven wholesale subsectors, accounting for two-thirds of total sales, declined.

The largest decrease came in the motor vehicle and parts subsector, which fell 4.4% in February. The motor vehicle industry, which accounts for close to 80% of the subsector, declined 5.3%. This was the first decrease in this industry since August 2009.

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The machinery, equipment and supplies subsector declined 2.8%, posting its first decrease in six months. The four industries that comprise this subsector were all down, with the largest drop recorded by the other machinery, equipment and supplies industry (-5.7%).

The largest increase in dollar terms was in the building material and supplies subsector (+1.5%), which saw increases in all three of its component industries. This subsector continued an upward trend that began in mid 2009.

After posting increases in January, wholesalers in Ontario and Quebec both reported lower sales in February. Ontario, which accounts for about half of Canada’s total wholesale sales, saw a decrease of 1.7%. Lower sales in the motor vehicle and parts subsector was a contributing factor to this drop. In Quebec, sales fell 2.4% in February, declining for the first time since September 2009.

In British Columbia, sales fell 4.3% in February, the first decline in five months.

Sales rose 5.5% in Saskatchewan, helped by higher sales of agricultural supplies. Since October 2009, wholesale sales in this province have risen by just over 35% to reach their highest levels since January 2009.

Wholesale inventories edged up 0.1% in February, the first increase since November 2008.

Overall, 12 of the 25 wholesale industries reported higher inventory levels. The largest increases in dollar terms were reported in the chemical (except agricultural) and allied product, home entertainment equipment and household appliance, and other machinery, equipment and supplies industries. Lower inventories were seen in the construction, forestry, mining and industrial machinery, equipment and supplies, personal goods, and new motor vehicle parts and accessories industries.

The decrease in sales, combined with the slight increase in inventories, translated into a rise in the inventory-to-sales ratio from 1.15 in January to 1.17 in February. This was the first increase in the ratio since August 2009.

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 data for March 2010 will be released on May 19.