Canada’s wholesale trade sector experienced a slight downturn in June 2024, marking a challenging month for several key industries. Data from Statistics Canada reveals that overall wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons as well as oilseed and grain, fell by 0.6% from the previous month to reach $82.4 billion. This decline underscores a broader trend within the Canadian economy, highlighting specific weaknesses in sectors that are vital to the nation’s trade activities.
The motor vehicle and motor vehicle parts and accessories subsector saw a significant decline for the second consecutive month, dropping 2.6% to $14.2 billion. This downturn was felt across all three industry groups within the subsector, with motor vehicle merchant wholesalers experiencing the steepest decline of 2.7%, bringing sales down to $11.5 billion.
The machinery, equipment, and supplies subsector also faced a challenging month, with sales decreasing by 0.5% to $17.9 billion. Notably, the farm, lawn, and garden machinery and equipment industry group recorded a sharp decline of 12.7%, bringing sales down to $2.5 billion.
The impact of declining wholesale sales was felt unevenly across Canada’s provinces. Ontario and Alberta, two of the country’s largest provincial economies, led the declines, while British Columbia stood out as an exception with positive growth.
In Ontario, wholesale sales fell by 1.1% to $43.0 billion in June, marking the province’s fifth monthly decline since the start of the year. The most significant drops were observed in the building material and supplies subsector, which decreased by 5.7% to $4.7 billion, and the motor vehicle and motor vehicle parts and accessories subsector, which fell by 1.8% to $10.2 billion.
Alberta, another key provincial player, experienced a 1.0% decrease in wholesale sales, bringing the total to $9.1 billion. This decline, the second in as many months, was largely driven by significant drops in the miscellaneous subsector, which fell by 9.9% to $994.9 million, and the machinery, equipment, and supplies subsector, which declined by 2.4% to $3.1 billion.
Conversely, British Columbia bucked the national trend, posting a 2.2% increase in wholesale sales, which reached $7.8 billion in June. This growth was fueled by a notable 12.8% increase in the miscellaneous subsector, which saw sales rise to $1.2 billion, and a 5.7% increase in the building material and supplies subsector, with sales climbing to $1.9 billion.
While wholesale sales experienced a decline, inventories remained relatively stable, edging down by just 0.1% to $126.8 billion in June.
The machinery, equipment, and supplies subsector saw the most significant inventory decline, dropping 0.7% to $38.8 billion, as three out of its four industry groups reported reductions in inventory levels. The personal and household goods subsector also recorded a decline, with inventories decreasing by 0.5% to $20.3 billion. The reductions were somewhat offset by inventory gains in the building material and supplies subsector, which increased by 0.8% to $22.2 billion, and the miscellaneous subsector, which saw a 1.1% rise to $15.1 billion.
Despite these fluctuations, the inventory-to-sales ratio—a key indicator of how long it would take to exhaust current inventory levels if sales remained steady—rose slightly from 1.53 in May to 1.54 in June. The increase suggests that, while inventories remain high, the pace of sales is not sufficient to significantly reduce stock levels.
Looking at the broader picture, the second quarter of 2024 saw a modest increase in wholesale sales, rising by 0.7% to $249.3 billion.
The personal and household goods subsector led the way in the second quarter, with sales increasing by 2.3% to $37.0 billion. The machinery, equipment, and supplies subsector also contributed to the overall growth, with sales rising by 1.5% to $54.0 billion. However, these gains were tempered by a 2.4% decline in the building materials and supplies subsector, which saw sales fall to $34.6 billion.
Year-over-year, the second quarter of 2024 outperformed the same period in 2023, with sales 1.4% higher. This annual increase highlights the resilience of Canada’s wholesale trade sector, even as it faces ongoing challenges.