Lower wholesale sales in April

Wholesale sales fell 0.5% in April to $79.8 billion, the second decrease in the past three months. Sales fell in five of seven subsectors comprising more than three-quarters of total wholesale activity in Canada. The largest declines were posted in the miscellaneous goods and the building materials and supplies subsectors. Growth in the machinery equipment and supplies subsector largely offset the declines. Constant dollar sales fell 0.6% in April.

Miscellaneous merchant wholesalers and building material and supplies saw decreased in sales for April

After two months of growth, sales in the miscellaneous merchant wholesalers declined 3.4% to $11.5 billion in April. 

The building material and supplies merchant subsector dropped for the second time in three months, down 1.4% to $14.0 billion in April. The lumber, millwork, hardware and other building supplies industry generated the bulk of the decline as its sales dropped by 3.8% to $7.5 billion. The decline in April reflected lower prices and volumes in the industry. According to the Industrial Product Price Index, prices for lumber and other wood products decreased 8.2% in April and international trade data showed that exports of lumber and other sawmill products fell 2.6% in April.

Partially offsetting the declines was a 1.8% increase in the sales of machinery, equipment and supplies. Sales in the machinery, equipment and supplies subsector have risen in seven of the past eight months. Three of four industries in the subsector recorded gains in April, led by the farm, lawn and garden machinery and equipment industry.

Quebec leads declines in sales while Alberta saw a slight increase

Six provinces reported lower sales in April, accounting for 86% of the national value. The declines were led by Quebec, followed by Ontario. Sales in Quebec decreased 2.1% to $14.7 billion in April, as all seven subsectors saw reduced sales while Ontario sales fell 0.4% to $40.4 billion in April. 

In April, four provinces and all three territories had increased sales. Among them, a 2.0% increase to $8.7 billion in Alberta partially offset the national decline. The gains in Alberta were largely driven by the machinery equipment and supplies merchant wholesalers which increased 6.8% to $2.6 billion and accounted for 68% of the province’s growth. The building material and supplies merchant wholesalers also contributed to the province’s growth, up 3.6% to $1.7 billion.

Inventories continue to rise in April

Inventories rose 1.7% to $111.5 billion in April, the third consecutive monthly increase. All seven subsectors reported increased inventories for the first time since May 2019, led by the machinery, equipment and supplies, and the building material and supplies subsectors. The inventory to sales ratio increased from 1.37 in March to 1.40 in April. This ratio is a measure of the time (in months) required to exhaust inventories if sales were to remain at their current levels.

Source: Statistics Canada