Canada Wholesale Sales Fall 1.1% in March

By Robb M. Stewart

OTTAWA--Canadian wholesale trade weakened in March, driven by sharply lower sales of motor vehicles as several manufacturing plants began retooling work on assembly lines to produce new models.

Wholesale sales fell 1.1% from the month before to a seasonally adjusted 81.41 billion Canadian dollars, the equivalent of $59.56 billion, Statistics Canada said Tuesday. The pullback was slightly less than the data agency's advance estimate for a 1.3% decline, after sales in February were essentially unchanged.

In price-adjusted terms, sales fell 1.2% in March, an indication of a fall in sales volumes, the data agency said. On a one-year basis, nominal wholesale sales slipped 0.4%, while transactions on a volume basis were up 0.9%.

The weakness in the latest month left wholesale sales for the first quarter down 0.4% to about C$245.8 billion, again led by weakness in motor vehicles, parts and accessories, as well as a decline in building material and supplies trade.

Wholesalers--the largest component of Canada's services sector--connect farmers or manufacturers that produce goods with companies and public institutions that use them. They also import goods from other countries and redistribute them within Canada.

Three of the seven wholesale sectors tracked by Statistics Canada posted declines in the latest month. Stripping out the motor vehicle and parts segment, overall sales edged 0.1% lower than in the month before.

Following declines the previous two months, the value of wholesale inventories rose 0.7% in March to C$127.55 billion. The rise was led by the machinery, equipment and supplies sector, as well as increases in inventories of personal and household goods.

Including sales by petroleum, oilseed and grain merchants--the headline measure Statistics Canada is transitioning to--wholesale sales for March were 1.1% lower at C$118.70 billion. Inventories on the same basis increased 1.9% to C$142.89 billion.

After stalling in the second half of last year, Canada's economy has picked up in the new year even as inflation has cooled and even as unemployment has steadily risen. The Bank of Canada, which has left its policy interest rate steady at a more than two-decade high since last raising it in July, has forecast the economy will strengthen as gross domestic product growth hits 1.5% this year and about 2% in 2025 and 2026.

Write to Robb M. Stewart at [e-mail]

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