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MNI DATA ANALYSIS:Canada Dec Wholesale Sales Decline But 4Q Up>

By Yali N'Diaye
     OTTAWA (MNI) - Canadian wholesale sales decreased 0.5% in December 
to C$63.0 billion, more than erasing the 0.3% gain recorded in November, 
and bringing down the 12-month growth rate to 7.7% from 10.5%, data from 
Statistics Canada showed Tuesday. 
     The weakness in December was reflected in the 0.9% drop in real 
sales, in the widespread nature of the declines across five of seven 
subsectors representing 65% of wholesale trade, as well as declines 
across six provinces. 
     The weak performance was also reinforced by the 0.4-percentage 
point downward revision to November's growth rate to 0.3%, while 
October's growth rate was revised up just 0.1 point to 1.7%. 
     Along with lower sales, inventories increased 1.7%, their largest 
gain since January 2015, following a 0.7% decrease in November. 
     As a result, the inventory-to-sales ratio rose to 1.31 in December 
from 1.29 in November. 
     Despite the weak performance of the wholesale trade sector in 
December, sales were still up 1.1% in the fourth quarter, with volumes 
up 0.7%, although both marked a slowdown from the previous quarter. 
     The wholesale trade sector should therefore bring a positive 
contribution to the fourth quarter GDP. 
     On a sector basis, sales decreased across five categories, led by 
personal and household goods (-3.3%) and miscellaneous sales (-2.4%). 
     Motor vehicles and parts were down 1.4% in December. Excluding the 
latter category, sales were still down 0.4% on the month, erasing 
November's 0.3% advance. 
     Food, beverage and tobacco was down 1.4%, and farm product down 
     On the bright side, machinery, equipment and supplies sales 
increased 2.3% on the month, offsetting November's 2.2% decline, a 
positive sign for investment activity. 
     For the fourth quarter, the category posted a gain of 3.5%. 
     Building material and supplies was the other sector to record an 
increase in December (+2.7%). 
     --2017 STRONG OVERALL 
     For 2017 as a whole, wholesale sales were up 9.4%, the largest 
annual increase since 1997, to a record high level of C$741.1 billion, 
with gains in all seven major subsectors. 
     The robust 2017 performance owed to the strong showings in the 
first and second quarters, when sales rose 3.9% and 2.5%, respectively. 
     Sales volumes rose by a record 7.7% in 2017 to a record level of 
C$652.7 billion. 
     Machinery, equipment and supplies rose 10.8%, and was the largest 
contributor to higher sales in 2017. It accounted for 19.7% of wholesale 
     Higher sales of machinery, equipment, and supplies coincided with 
strong business investment gains in the first half of the year. 
--MNI Ottawa Bureau; email: 

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