Canadian Wholesale Trade Shows Slight Softness in Final Month of 2023

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OTTAWA – In the last month of 2023, Canadian wholesale trade experienced a slight softening, despite a rise in sales driven by personal and household goods. This positive performance in the sector concluded a successful year.

According to Statistics Canada, wholesale sales increased by 0.3% on a seasonally adjusted basis from the previous month, amounting to 82.94 billion Canadian dollars ($61.60 billion). However, this figure fell short of the data agency’s initial estimate of an 0.8% rise in sales.

In terms of volume or price adjustments, sales saw a modest increase of 0.2% compared to the prior month.

Furthermore, reflecting the momentum from November’s 0.9% sales growth, nominal wholesale sales for the last quarter of 2023 experienced an overall increase of 0.8% to approximately C$247.5 billion and rose by 1.5% over the course of the year, reaching approximately C$986.9 billion.

Wholesalers play a vital role in Canada’s services sector as they serve as intermediaries between farmers or manufacturers who produce goods and the companies and public institutions that utilize them. Additionally, wholesalers are responsible for importing goods from other countries and redistributing them within Canada.

Out of the seven sectors monitored by Statistics Canada, three sectors showcased higher sales in December. The personal and household goods segment experienced a significant surge of 4.1%, mainly driven by pharmaceuticals and pharmacy supplies. Sales within the food, beverage, and tobacco category also exhibited growth, building upon the gains seen in November. However, this growth was partially offset by a decline in sales of motor vehicles, parts, and accessories.

Wholesale Trade in December Increases Excluding Vehicle and Parts Sales

In December, wholesale trade, excluding vehicle and parts sales, experienced a 0.9% increase compared to the previous month.

Rise in Wholesale Inventories

The value of wholesale inventories also saw a rise of 1.2% for the month, amounting to C$129.51 billion. This level of inventory is comparable to the early months of 2023. The machinery, equipment, and supplies sector contributed significantly to this increase, along with the motor vehicle, parts, and accessories segment.

Overall Wholesale Trade Decline in December

When including sales by petroleum, oilseed, and grain merchants, the overall wholesale trade in December declined by 4.1% compared to the previous month, reaching C$117.62 billion.

Increase in Inventories

However, inventories on the same basis experienced a slight increase of 0.7%, totaling C$143.36 billion.

Manufacturing Sales Report

Earlier in the week, Statistics Canada reported a 0.7% decrease in manufacturing sales for December, primarily driven by a significant drop in motor vehicle sales.

Outlook for the Economy

The Bank of Canada anticipates that the economy will remain weak in the first half of this year. However, a flash estimate suggesting GDP growth in December indicates a potential recovery in the final quarter of 2023 following a third-quarter contraction.

Stay tuned for the release of retail sales data for December on Thursday, as well as official industry-level gross domestic product at the end of the month.

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