MRO Magazine

April’s wholesale trade inventories rose for the second time in three months

Ottawa, ON -- Wholesale sales declined 0.3% in April 2010 to $44.0 billion, following a 1.2% increase in March...


Ottawa, ON — Wholesale sales declined 0.3% in April 2010 to $44.0 billion, following a 1.2% increase in March 2010, Statistics Canada reports. In volume terms, wholesale sales rose by 0.4% in April.

The increase in the volume of sales, compared with the decline in sales in current dollars in April, principally reflects lower prices paid by wholesalers for imported goods. This was caused, in part, by the appreciation of the Canadian dollar with respect to the US currency during the month.

Since the low reached in January 2009, the volume of wholesale sales has rebounded by 17.1%, with 14 monthly increases in 15 months.

April’s drop in sales was mainly attributable to lower sales in both the motor vehicle and parts subsector and the miscellaneous subsector. These declines were partially offset by increased sales of personal and household goods. The other four subsectors registered slight fluctuations in sales in April.

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The largest decline was in the motor vehicles and parts subsector. Sales in this subsector fell 2.5% to $7.1 billion in April, reflecting a 3.3% decrease in the sales of the motor vehicle group.

The second largest decline was in the miscellaneous subsector, pushed down by decreased sales of other miscellaneous products (-3.0%), recyclable materials (-2.9%) and chemical (except agricultural) and allied products (-2.0%).

The personal and household goods subsector (+1,5%) registered its first increase in three months, mainly due to higher sales in the textile, clothing and footwear group (+18.8%) and the pharmaceuticals and pharmacy supplies group (+1.2%).
Sales down in eight provinces

Wholesale sales were down in eight provinces in April, while Quebec and Manitoba posted gains.

Sales edged down 0.3% in Ontario in April, partially offsetting the increase in March. This decline mainly reflected lower sales in the motor vehicles and parts subsector.

Wholesale sales in British Columbia were down 3.1%. In Alberta, sales fell 1.6% to $4.9 billion, marking the first monthly drop in sales in that province in six months.

In Quebec, sales rose 2.4% in April, the first increase in three months. The increase in Quebec was largely attributable to higher sales in the personal and household goods and food, beverage and tobacco product subsectors.

Wholesale trade inventories rose for the second time in three months, after declining steadily since December 2008. Inventories increased 0.6% in April to $51.3 billion.

Overall, 12 of the 25 wholesale trade industry groups reported higher inventories.

Wholesalers in the lumber, millwork, hardware and other building supplies group registered the largest increase in inventories in dollars terms, followed by the food product group.

The increase in inventories, combined with the slight decrease in sales, translated into a rise in the inventory-to-sales ratio from 1.16 in March to 1.17 in April.

In 2009, the inventory-to-sales ratio was down sharply, going from 1.41 in January to 1.19 in December. However, since the start of 2010, the ratio has held relatively steady, hovering around 1.16. This was lower than the levels observed before the economic downturn.

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 May will be released on July 21.