In the latest economic update, Statistics Canada reports a 0.4% increase in wholesale sales for September 2023, excluding petroleum, petroleum products, and other hydrocarbons, as well as oilseed and grain. The total value of wholesale sales reached $83.1 billion during the month.
This rise in sales is attributed to positive performances in four of the seven subsectors, with the motor vehicle and motor vehicle parts and accessories subsector and the food, beverage, and tobacco subsector leading the way. On an annual basis, wholesale sales saw a 1.6% increase in September compared to the same month in the previous year.
The motor vehicle and motor vehicle parts and accessories subsector experienced a notable 2.2% increase, reaching $14.6 billion in September. This marks the third consecutive month of growth for this subsector, driven by a 2.8% increase in the motor vehicle industry group, reflecting the ongoing surge in imports of motor vehicle parts and higher imports of passenger cars and light trucks.
Similarly, the food, beverage, and tobacco subsector contributed to the overall growth, with a 1.6% increase totaling $15.0 billion in September. The food industry group played a pivotal role in this expansion, growing by 2.0% to $13.3 billion, partly due to higher prices.
However, these positive trends were partially offset by a 2.1% decline in sales in the miscellaneous subsector, which fell to $10.1 billion. Notably, sales in the agricultural supplies (-8.1% to $3.1 billion) and the recyclable material (-10.8% to $1.2 billion) industry groups experienced a decline, following sharp increases in August.
Provincially, Ontario led the way in sales growth for the second consecutive month, with a 1.2% increase to $44.1 billion in September. This growth was observed in five of the seven subsectors, with the food, beverage, and tobacco subsector experiencing the most significant increase at 5.1% to $7.2 billion.
Quebec followed with a 0.8% increase in wholesale sales, reaching $14.8 billion in September. Higher sales were reported in the miscellaneous subsector (+6.0% to $1.5 billion) and the personal and household goods subsector (+1.2% to $3.1 billion).
Manitoba also saw a notable increase of 3.8% in wholesale sales, totaling $2.0 billion in September. The machinery, equipment, and supplies subsector led the way with a substantial 15.2% increase to $441.4 million.
Inventories, however, experienced a 1.6% decrease to $126.2 billion in September. This decline was observed in four of the seven subsectors, with the machinery, equipment, and supplies subsector leading with a 3.8% decrease to $36.8 billion.
The inventory-to-sales ratio dropped from 1.55 in August to 1.52 in September, indicating a slight improvement in the efficiency of inventory management.
Looking at the third quarter of 2023, wholesale sales (excluding petroleum, petroleum products, and other hydrocarbons, and excluding oilseed and grain) increased by 1.0% to $247.1 billion. The motor vehicle and motor vehicle parts and accessories subsector saw the most significant quarterly increase, rising by 7.3% to $43.1 billion, followed by the building material and supplies subsector, which increased by 1.2% to $35.7 billion.
While the Canadian wholesale sector experienced modest growth in September, positive quarterly performances suggest a generally healthy trend in the industry. However, challenges such as declining inventories in certain subsectors warrant close monitoring in the coming months.