Analysis: Canada August Wholesale Sales +0.5%; Ex Autos +0.1%>

By Yali N'Diaye

     OTTAWA (MNI) - Canadian wholesale sales rose a further 0.5% in 

August to a record C$62.8 billion, Statistics Canada reported Monday, 

leaving the 12-month growth rate little changed at 10.1% after 10.2% in 

July. 

     While August expansion represented a slowdown from the previous 

month, July was revised up 0.2 percentage points to a monthly gain of 

1.7%. 

     In addition, the increase in August was due to stronger activity, 

as sales volumes rose 0.4%, explaining nearly all of the monthly 

advance. 

     However, gains were concentrated in four of seven subsectors, 

representing 47% of wholesale trade, led by motor vehicles and parts 

(+2.0%) and personal and household goods (+3.3% to a record C$9.0 

billion). 

     Excluding autos and parts, which also recorded higher imports and 

manufacturing sales over the month, wholesale sales edged up just 0.1% 

following a 1.9% gain in July. 

     On the other hand, building, material and supplies posted lower 

sales for the first time in six months, as they declined 3.5% after 

rising 5.4% in July. 

     Sales of machinery, equipment and supplies were unchanged in 

August, following a 0.7% increase in July, perhaps a sign business 

investment activity is softening. 

     Regionally, sales rose in five provinces, led by Ontario, Quebec, 

and British Columbia. 

     Meanwhile, inventories rose 0.2% on the month, leaving the 

sales-to-inventories ratio unchanged at 1.29. 

     Assuming sales remained unchanged at C$62.8 billion in September, 

their quarterly growth pace would slow to 2.0% in the third quarter from 

2.6% in the second quarter, according to MNI's calculations, in line 

with the Bank of Canada's overall expectation of a growth slowdown in 

the second half of this year. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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