MRO Magazine

Agricultural supplies industry sales in June reach lowest level in 6 months while food industry sees sixth increase in 7 months


Ottawa – Wholesale sales decreased 1.0% to $54.5 billion in May 2015, following two consecutive increases, according to the latest survey of wholesale trade from Statistics Canada. Lower sales in four subsectors, which together represented 65% of wholesale sales, accounted for the decline. Excluding the motor vehicle and parts subsector, wholesale sales declined 0.6%.

In volume terms, wholesale sales were down 1.0%.

Lower sales in four subsectors

The motor vehicle and parts subsector posted the largest decline in dollar terms in May, decreasing 3.1% to $9.7 billion following two consecutive gains. The motor vehicle industry accounted for the decline in May, down 4.2% following a 12.5% gain in April.

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The miscellaneous subsector declined for the fourth time in five months, down 3.7% to $7.1 billion in May, more than offsetting its gain in April. The agricultural supplies industry (-6.3%) contributed the most to the decline, reaching its lowest level in six months. The recyclable material industry declined for the sixth time in eight months, down 5.6% to its lowest level in 16 months.

Sales in the machinery, equipment and supplies subsector decreased 1.8% to $11.1 billion in May, more than offsetting the gain in April. A third decrease in four months in the other machinery, equipment and supplies industry (-4.6%) led the decline. Another large contributor was the farm, lawn and garden machinery and equipment industry (-7.5%), which posted its second consecutive decrease. May’s decline brought this industry to its lowest level since July 2012.

The personal and household goods subsector recorded a second consecutive decline in May, down 0.4% to $7.6 billion, on weaker sales in four of its six industries.

Sales in the food, beverage and tobacco subsector rose 2.3% to $10.7 billion in May, more than offsetting the decline in April. The food industry (+2.6%) led the gain with its sixth increase in seven months.

Sales down in six provinces

In May, sales were down in six provinces, which together represented 86% of wholesale sales. Ontario and Alberta contributed the most to the decline.

In Ontario, sales decreased 1.1% to $27.2 billion in May, offsetting some of its 3.4% gain in April. Lower sales in the motor vehicle and parts subsector and the machinery, equipment and supplies subsector led the decline.

Alberta recorded a sixth consecutive decline, decreasing 2.2% to $6.7 billion in May. The miscellaneous subsector and the machinery, equipment and supplies subsector were the largest contributors to the decline. The miscellaneous subsector also contributed to a fifth consecutive decline in Saskatchewan, down 3.0% to $2.3 billion, and to lower sales in Newfoundland and Labrador, down 7.4% to $400 million.

Sales were down in Quebec for the third time in four months, declining 0.8% to $9.7 billion in May. Lower sales in the motor vehicle and parts subsector led the decrease.

Sales in British Columbia rose 1.2% to $5.2 billion in May, on the strength of widespread gains across subsectors. The increase partially offset the decline in April.

Inventories edge up in May

Wholesale inventories edged up 0.1% to $71.7 billion in May, a seventh consecutive increase. Gains were recorded in four of seven subsectors, representing 56% of total wholesale inventories.

Following two consecutive declines, the personal and household goods subsector (+2.0%) recorded the largest increase in dollar terms in May.

Inventories in the food, beverage and tobacco subsector (+1.4%) rose for a second consecutive month, while the machinery, equipment and supplies subsector (+0.2%) recorded a sixth consecutive increase.

Following two consecutive gains, the motor vehicle and parts subsector (-1.8%) recorded the largest decrease in dollar terms.

Inventories declined for the first time in 15 months in the building material and supplies subsector (-0.5%).

The inventory-to-sales ratio rose from 1.30 in April to 1.32 in May. 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.