Wholesale sales in Canada, excluding petroleum, petroleum products, and other hydrocarbons as well as oilseed and grain, experienced a downturn in May 2024, decreasing by 0.8% to $82.2 billion, according to recent data from Statistics Canada. This marks a notable shift after a previous period of stability and growth in the sector.
The decline in wholesale sales was observed across five of the seven key subsectors, with the motor vehicle and motor vehicle parts and accessories subsector leading the downward trend. This subsector, which had seen a significant rise in April, fell by 3.8% to $13.9 billion in May. The most substantial decrease within this group was seen in motor vehicle merchant wholesalers, which dropped by 4.4% to $11.2 billion. This reduction aligns with a broader decrease in motor vehicle sales from Canadian manufacturers and a 7.1% decline in imports of passenger cars and light trucks during the same period.
The machinery, equipment, and supplies subsector also faced a setback, with sales decreasing by 0.4% to $17.9 billion. This was the first decline in this subsector in five months. The most significant drops within this category were in the computer and communications equipment and supplies industry group, which fell by 2.5% to $4.9 billion, and the farm, lawn, and garden machinery and equipment industry group, which declined by 2.8% to $2.8 billion.
The miscellaneous subsector, after seeing an increase in the previous month, decreased by 0.5% to $10.4 billion in May. This decline was driven by reductions in four out of its seven industry groups.
Geographically, the decline in wholesale sales was most pronounced in Manitoba, where sales fell by 13.5% to $1.7 billion. This marks the province’s fourth decline since the beginning of the year. The miscellaneous subsector and the machinery, equipment, and supplies subsector were the largest contributors to this drop, with sales in these categories falling by 18.0% to $288.7 million and by 14.3% to $377.3 million, respectively.
Quebec also experienced a decrease in wholesale sales, which dropped by 1.3% to $14.5 billion in May. This was the third consecutive monthly decline for the province. The machinery, equipment, and supplies subsector saw a significant reduction, falling by 5.0% to $2.5 billion, alongside a 5.2% decrease in the motor vehicle and motor vehicle parts and accessories subsector, which dropped to $1.8 billion.
In contrast, Ontario saw an increase in wholesale sales for the second consecutive month, rising by 0.5% to $43.2 billion. Gains were reported in six of the seven subsectors, with the machinery, equipment, and supplies subsector showing the most significant growth, increasing by 1.8% to $8.8 billion. However, the motor vehicle and motor vehicle parts and accessories subsector experienced a 2.5% decline to $9.8 billion, which limited the overall growth in the province.
Despite the overall decline in sales, wholesale inventories saw an increase of 0.9% to $127.8 billion in May. Inventories grew in four of the seven subsectors, with the machinery, equipment, and supplies subsector leading the way with a 1.3% increase to $39.3 billion. The building material and supplies subsector also contributed to the inventory growth, rising by 2.1% to $22.1 billion.
The inventory-to-sales ratio, which measures the time required to deplete inventories at the current sales pace, rose from 1.53 in April to 1.55 in May. This indicates that, despite the sales decline, inventory levels remain relatively high, potentially signaling a slower turnover rate in the coming months.
This data reflects a complex and varied landscape in Canada’s wholesale trade sector, highlighting significant regional and subsector disparities in performance.