Canada’s wholesale trade sector experienced a slight downturn in August 2024, with total sales falling to $81.9 billion, a 0.6% decrease from the previous month, according to data released by Statistics Canada. Excluding petroleum, petroleum products, hydrocarbons, oilseeds, and grain, the wholesale market saw declines in five of seven major subsectors, largely driven by decreases in motor vehicles, parts, and agriculture supplies.
In terms of volume, wholesale sales fell by 0.7%, indicating a continued contraction in key areas of the industry.
August’s drop in wholesale trade was heavily influenced by a 3.9% decline in the miscellaneous subsector, which includes agriculture supplies. Sales in this category fell by 5.6%, bringing in $3.2 billion. The agriculture supplies sector had previously been a growth driver but saw a notable retreat, contributing significantly to the overall dip in wholesale activity.
The motor vehicle and motor vehicle parts subsector, which had posted gains in July, also saw a downturn in August, dropping by 1.8% to $14.0 billion. Sales in this category decreased across two of its three industry groups, with motor vehicle merchant wholesalers taking the largest hit, down 2.5% to $11.3 billion.
Amid the declines, there were areas of growth, particularly in the personal and household goods subsector, which saw a 2.3% increase, reaching $12.5 billion. This rise was primarily fueled by a strong performance in pharmaceuticals and pharmacy supplies, which grew by 2.2% to $7.0 billion.
Provincially, Ontario experienced the sharpest drop in wholesale sales, falling by 1.4% to $41.7 billion. The province has now faced four consecutive months of declines, driven largely by decreases in the motor vehicle and parts subsector, which fell by 3.1% to $9.5 billion. Ontario’s miscellaneous subsector also struggled, with sales dropping 5.0% to $4.6 billion.
British Columbia followed with a 1.0% decline in wholesale sales, bringing in $7.7 billion for the month. The machinery, equipment, and supplies subsector suffered the most significant drop in the province, down 4.3% to $1.4 billion.
In contrast, Quebec saw a 1.1% increase in wholesale sales, reaching $15.1 billion. The growth was led by gains in the machinery, equipment, and supplies subsector, which rose by 3.2% to $2.5 billion, and the motor vehicle subsector, which increased by 2.5% to $2.0 billion.
While sales struggled, wholesale inventories increased by 0.3% to $127.3 billion in August. The personal and household goods subsector posted the largest inventory gain, up 2.2% to $20.6 billion, driven by stockpiling across three of its five industry groups. The building materials subsector also saw inventory increases, up 1.0% to $22.3 billion, though overall inventory levels in this category were still 6.1% lower than the previous year.
Despite these gains, the miscellaneous subsector’s inventory levels fell by 2.2% to $14.5 billion, limiting overall growth. As a result, the inventory-to-sales ratio, which indicates how long current inventories would last if sales remain unchanged, rose slightly from 1.54 in July to 1.56 in August, reflecting a build-up in stock amidst weakening sales.
The continued weakness raises concerns about the wholesale sector’s resilience heading into the final months of the year. The contrasting performances between provinces and subsectors, however, suggest that certain areas of the market, particularly pharmaceuticals and household goods, could provide a buffer against further declines.