MNI DATA ANALYSIS:Canada Wholesale Sales -0.1%; Ex Autos +0.2%>

By Yali N'Diaye

     OTTAWA (MNI) - Canadian wholesale sales edged down 0.1% in August, 

faring slightly better than the market expectation of a 0.2% decrease, 

bringing down the 12-month growth rate to 3.5% from 3.7%, data from 

Statistics Canada showed Monday. 

     Inventories contracted 0.5% after rising 1.7% in July, lowering the 

inventory-to-sales ratio to 1.36 from 1.37. 

     July's sales growth estimate was revised down to 1.1% from 1.5%, 

mainly rflecting revisions in the auto and miscellaneous sectors. 

     In addition, the decrease in August was due to weaker activity as 

real sales contracted 0.1%, following a 0.8% gain in July (revised down 

from +1.2%). 

     Sales declined in 4 of 7 subsectors, representing 65% of wholesale 

trade, led by the auto and parts and building materials and supplies 

sectors. Regionally, decreases were concentrated in four provinces, 

representing 81% of wholesale trade. 

     Sales of autos and parts fell 1.4% to C$10.8 billion, their lowest 

level since November 2016. 

     Sales of building materials and supplies fell 2.3% in August, with 

volumes down 2.5%. During the month, housing starts fell 6.4% and export 

if forestry products and building and packaging materials also 

decreased. 

     Some details, however, were positive. 

     Excluding autos and parts, sales were up 0.2% from July, and 6.2% 

from August 2017, after a 5.5% 12-month gain in July. 

     In addition, sales of machinery, equipment and supplies rose 2.2%, 

the largest monthly gain since December 2017, to a record C$13.3 

billion, owing to a 2.5% gain in volumes, a positive sign for investment 

activity in Canada. 

     The Bank of Canada continues to rely on business investment and 

exports to take over from household consumption and housing as drivers 

of growth. Monday's wholesale sales report validated such view, with 

personal and household goods sales down 0.5%, entirely due to lower 

activity. 

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

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