MRO Magazine

Wholesalers of machinery, equipment and supplies see year over year margin gains of 3%


Industry

February 23, 2015
By Bill Roebuck

Ottawa – Statistics Canada’s Wholesale Services Price Index (WSPI) decreased 0.4% in the third quarter. This was the first decline in five quarters. Of the eight major wholesale sectors, margins were down in four and up in four.

The largest decline in the third quarter was posted by wholesalers of farm products (-5.1%). The decrease in the farm sector resulted from lower margins for canola for all three months of the quarter.

Margins for wholesalers of petroleum products (-3.6%) declined as a result of lower margins for gasoline and diesel fuel. Wholesalers of food, beverage and tobacco (-3.3%) posted their first quarterly margin decrease in seven quarters and contributed to the third quarter reduction in the WSPI. The decrease was mostly driven by margin reductions posted by wholesalers of seafood, fresh fruit and vegetable, speciality-line food as well as cigarette and tobacco products.

Margin decreases by wholesalers of machinery, equipment and supplies (-0.2%) also contributed to the decrease in the WSPI.

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Moderating the decline in the WSPI were margin increases by wholesalers of building material and supplies (+1.8%), miscellaneous products (+1.5%), motor vehicles and parts (+0.9%) and personal and household goods (+0.5%).

Year over year, the WSPI advanced 3.0% in the third quarter.

The year-over-year gain in the WSPI was mainly attributable to margin increases registered by wholesalers of petroleum (+14.9%) and farm (+6.7%) products. Higher prices for natural gas in the fourth quarter of 2013 and the first quarter of 2014 drove margins up in the petroleum sector year over year.

Higher crop production in 2013, coupled with growing inventories, continued to put downward pressure on the purchase price for oilseed and grain products. However, selling prices did not fall at the same rate as declining purchase prices, causing margins to increase.

Wholesalers of food, beverage and tobacco products (+3.4%) posted their fifth consecutive year-over-year increase in the third quarter.

Margin gains by wholesalers of building materials and supplies (+3.1%), machinery, equipment and supplies (+3.0%), motor vehicles and parts (+2.0%) and miscellaneous products (+1.1%) also contributed to the year-over-year advance.

Year over year, the margin for personal and household goods declined 0.2%.