MRO Magazine

Wholesale sales growth of 2.1% seen in July in machinery, equipment and supplies

Ottawa, ON -- Wholesale sales advanced 0.8% in July to $48.2 billion after remaining unchanged in June, according to Statistics Canada. Although five of the seven subsectors, representing more than 85% of total sales, reported increases, most...


Ottawa, ON — Wholesale sales advanced 0.8% in July to $48.2 billion after remaining unchanged in June, according to Statistics Canada. Although five of the seven subsectors, representing more than 85% of total sales, reported increases, most of the growth was concentrated in the machinery, equipment and supplies, the personal and household goods, and the motor vehicle and parts subsectors.

In volume terms, wholesale sales grew 1.5% in July. The difference between the growth rates expressed in current and constant dollars reflects lower prices for imported products sold by wholesalers. This was partly attributable to the appreciation of the Canadian dollar relative to the American dollar during the month.

Widespread sales increase

 

The machinery, equipment and supplies subsector registered the highest increase in dollar terms as sales rose 2.1% in July. All four industries in this subsector posted gains with the largest increase from wholesalers of construction, forestry, mining, and industrial machinery, equipment and supplies.

Sales in the machinery, equipment and supplies subsector have been showing an upward trend since the second quarter of 2010. This reflects higher business investment in plant and equipment, which has increased for six consecutive quarters.

After a decline in June, sales in the personal and household goods subsector rose 2.9% in July, the highest month-over-month growth recorded by this subsector since April 2008. Sales grew in most of the industries, with personal goods reporting the highest increase.

Following three consecutive months of declines, sales in the motor vehicle and parts subsector advanced 2.6% in July. This coincided with higher production and imports of automotive products. Prior to July, sales in this subsector had been affected by disruptions in the supply chain following the earthquake and tsunami in Japan in March.

Overall growth in wholesale trade in July was dampened by a 5.1% decline in the miscellaneous subsector. This resulted mainly from lower sales of agricultural supplies (-18.5%), which had been strong in May and June.

Ontario accounts for most of the increase

 

Ontario accounted for almost all of the national sales increase in July. Sales grew 2.1% after declining 0.9% in June. Higher sales of machinery, equipment and supplies, and motor vehicle and parts contributed to most of the increase.

Among the western provinces, only Manitoba (+1.1%) posted an increase. After increasing in June, sales in Saskatchewan and Alberta declined largely as a result of lower sales in the agricultural supplies industry.

In the Atlantic provinces, only Prince Edward Island reported gains as its sales grew 0.4%.

Sales in Quebec fell slightly (-0.1%), their second consecutive decrease.

Inventories continue to rise

 

Inventories rose 0.3% to $56.5 billion in July, posting their seventh consecutive monthly increase.

Inventories were up in 11 of the 25 wholesale industries. Wholesalers in the construction, forestry, mining, and industrial machinery, equipment and supplies industry, and the new motor vehicle parts and accessories industry reported the largest gains in dollar terms.

The inventory-to-sales ratio declined from 1.18 in June to 1.17 in July.

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.